The petition of residents of the constituency of Lewisham East,
Declares that Moat Housing has written to inform the residents in Phoebe’s Place, SE62FA, which was developed in 2021 of 27 Flats as part of the affordable housing scheme, regarding increases in rent ranging from 8.6% to 9.4%, and increases in service charge, ranging from 30.3% to 65%; notes that this exceeds current levels of inflation; and further that the petitioners believe that the proposed rent and service charge increases are not justified nor affordable.
The petitioners therefore request that the House of Commons urge the Government to call on Moat Housing to review their decision and that any increase in this year and in future years remain at the very least in line with inflation.
And the petitioners remain, etc.—[Presented by Janet Daby, Official Report, 26 March 2024; Vol. 747, c. 1466.]
[P002948]
Observations from the Parliamentary Under-Secretary of State, Department for Levelling Up, Housing and Communities (Baroness Scott of Bybrook):
I am sorry to hear of the petitioners’ concerns over the recent increases to their rent and service charges. We have been clear in our discussions with registered providers of social housing that we expect them to take reasonable and responsible decisions at a time when many shared owners are experiencing pressures on their finances.
Annual increases to shared ownership rents are set according to the terms of the lease agreement between a shared owner and their registered provider. As these are legally binding agreements, any decision to implement an increase below the amount permitted in the lease is a decision for individual registered providers to take independently.
The Government welcome the fact that most registered providers chose to limit their annual shared ownership rent increases to no more than 7% in 2023-24, in response to particularly high levels of inflation. This mirrored the regulatory limit of 7% that was imposed for other forms of rented social housing in 2023-24.
Increases in service charges without proper justification are completely unacceptable, which is why were are committed to strengthening protections for leaseholders, including shared owners, through the Leasehold and Freehold Reform Bill.
If a shared owner is concerned about a service charge they are being asked to pay, they can seek free and independent initial advice from the Government-funded Leasehold Advisory Service.
There are also routes for redress open to shared owners where they consider that a service charge has been wrongly incurred or is excessively high. For example, variable service charges are subject to specific legal requirements. These are that service charges must be reasonable and that, where costs relate to work or services, the work or services must be completed to a reasonable standard. Where necessary, shared owners may make an application to the First-tier Tribunal —Property Chamber—for a determination on the reasonableness of their variable service charges.
We know that leaseholders may be liable currently to cover their landlord’s legal costs as part of any application to the First-tier Tribunal, and that this may act as a deterrent to some applications. The Leasehold and Freehold Reform Bill will address this imbalance by scrapping the presumption that leaseholders, including shared owners, pay their landlord’s legal costs when taking disputes to the First-tier Tribunal.
The Bill also includes proposals to ensure that leaseholders receive minimum key financial and non-financial information on a regular basis. This will help leaseholders, including shared owners, to more easily challenge poor practice, including in relation to service charges.
If shared owners are unhappy with any communications surrounding how their service charges are calculated, they should approach their registered provider directly through their official complaints process. If this fails to resolve the matter satisfactorily, they may be able to ask the Housing Ombudsman to investigate their complaint. The Ombudsman does not investigate complaints about the level of service charges, but it may investigate complaints about their calculation, collection, or communication.
Further information on how to make an official complaint to a registered provider and then, where necessary, to the ombudsman can be found via the website for our “Make Things Right” campaign.