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MONEY MADNESS
My service charge has gone from nothing to £3k a year – now I’m scraping by on benefits and have no savings
We explain how you can challenge your service charge below
WHEN Linda Mawer first took on her parents' old council flat in Bootle, Merseyside, she was looking forward to a simple retirement.
The now 71-year-old moved up to the property from London in the summer of 2018 when her mum Anne died.
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"I came back because my parents got ill," she said.
"I thought how nice would that be I won't have to worry about anything when I retire."
But in reality, she's spent countless nights stressing over the huge bills that are now attached to the flat she was supposed to spend a carefree retirement in.
The service charge on the pensioner's apartment currently sits at £3,000 a year, compared to just £400 when her parents bought it from the local council in 2002.
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Anne has now spent all her savings on the £250 monthly bills and says she is just about scraping by on attendance allowance and state pension.
She receives a full state pension of £221.20 each week, and around £227 a month attendance allowance.
Attendance allowance is paid to those suffering from long-term physical or mental conditions or disabilities.
But the payments from both have left her with just £100 a week to live on, after factoring in the sky-high service charge and other bills such as council tax and electricity and gas.
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The hefty service charge, which covers electricity for common areas in the block of flats, communal cleaning and security staff, is paid to housing association One Vision.
The pensioner said she feels stuck, as while the service charge is high, it would actually work out more expensive for her to move into a property she doesn't own.
Repairs your landlord is responsible for if you rent
Meanwhile, the high service charge has made the home difficult to sell, and other equivalent flats also come with high service fees.
"What savings I had have gone now," Linda said.
"This is just not the relaxed retirement I envisaged.
"Gone are the days when I could afford a holiday - I'm living on £100 a week to pay for food and a social life.
"I've never had to think to myself, 'I can't afford this' before, but I went out with my friends the other day and realised I couldn't afford to spend £30 on a meal with them."
Linda's service charge could have been even more than what it is now too.
She claims she was facing a £4,500 bill alongside seven other tenants in the block of flats who are leaseholders like her before they challenged it with One Vision, which relented and agreed to take £3,000 this year.
Linda said: "The other tenants and I kicked up a fuss and we managed to get it reduced."
If you are a leaseholder, it means you own the right to live in your property, but you don't own the land it's built on.
The Sun asked One Vision Housing to comment but it did not respond.
What is a service charge?
A service charge is paid by either a property owner or tenant to cover the cost of maintaining communal areas around their home.
In most cases, service charges apply to those who live in blocks of flats or new-build properties within a housing development.
What your service charge covers varies depending on where you live, but may include costs for cleaning, repairs and general maintenance of communal areas like hallways, lobbies, gardens and lifts.
Most service charges go up each April in line with increased costs such as rising energy bills or the cost of services.
But the Government's 2023 Rent Standard says councils and housing associations should try to limit increases to no more than 7% each year.
How to challenge a service charge
If you're a leaseholder, like Linda, you can challenge your service charge if you think it's unfair.
If there are other leaseholders in your property development or block of flats, you can submit a joint complaint to the landlord.
This is what Linda did with her neighbours and they managed to get £1,500 wiped off their yearly service charge.
Charity Shelter's website has a useful letter template you can use to email your landlord.
If you're not happy with your landlord's response, you can complain to the Housing Ombudsman.
Potential hidden charges with leasehold properties
One of the biggest mistakes buyers make when buying a house is choosing a leasehold property without understanding the extra costs or rules around it.
They're common and not always possible to avoid, but it's important to know what you're getting yourself into.
Owning a leasehold on a property means you have the right to live in it for a set period of time.
In the UK, the standard amount of time is 125 years, but it could be more or less.
Unless you extend it, the ownership of the property returns to the landlord when it's up, also known as the freeholder.
It's important to consider how long is left on the leasehold before buying it as the longer buyers leave it, the more money they stand to lose.
The cost of extending a lease varies wildly - from just £1,000s to £10,000s.
Another issue with buying a leasehold property could arise if you live in a building block.
If you're in a block of flats then somebody owns the freehold of that block.
That freeholder is responsible for maintaining the condition of those parts of the building that might not be connected to your property like the roof.
If it incurs damage, for example, as a leaseholder, you'll still have to pay for that by a service charge.
This is why it's important to not only look at the interior and parts of the leasehold property during the survey.
There's an online complaints form you can download off of its website.
If you can't use the form, you can call 0300 111 3000 or email [email protected] for help.
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You might also be able to take your complaint to tribunal if you think your charge is higher than it should be.
There's more details about how you can do this on the Leasehold Advisory Service website.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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