"There is no end in sight for these soaring costs, with freeholders and housing associations expecting further increases. Leaseholders deserve transparency, but they also need action to reduce their expenses"
- Sem Moema - former chair of the London Assembly Housing Committee
The Mayor of London should commit to limiting service charges on new shared-ownership homes to ease the financial burden on leaseholders, according to a new report from the London Assembly Housing Committee.
Leasehold homes make up over 36% of London’s housing stock, more than double the 16% seen across the rest of England. This leaves the capital especially vulnerable to rising service charges linked to leasehold properties.
The report titled “Worry and stress” – life as a leaseholder in London calls for the Mayor to include measures for “designing down service charges” in the updated London Plan expected next year.
A survey by the committee reveals the extent of the problem:
Leaseholders pay a median service charge of £3,912 annually (£326 monthly), with 11% spending more than £7,000 a year
Many respondents reported poor transparency about charges, incomplete or poorly executed work, and some described the fees as fraudulent or exploitative
Shared ownership’s affordability is increasingly questioned due to uncapped service charges, despite it being promoted by the Mayor as an affordable housing option
The report’s main recommendations are:
The Mayor should improve transparency around service charges by updating the Leasehold Guide for Londoners and the Service Charges Charter
The Government needs to grant social renters the same rights as leaseholders to access full service charge statements and invoices
Developers should be required to demonstrate to local authorities how they maximise the lifespan of building components to ensure better value over time for leaseholders
The Greater London Authority should explore models to cap service charges in new-build shared ownership homes
“Londoners are being hit hard by increasing service charges, often with no clear idea of what they are receiving in return for their money,” said Sem Moema, former chair of the London Assembly Housing Committee.
“There is no end in sight for these soaring costs, with freeholders and housing associations expecting further increases. Leaseholders deserve transparency, but they also need action to reduce their expenses.”
Moema added: “We are calling on the Mayor to do his part by capping service charges on new shared ownership homes and committing to drive down charges through his new London Plan.”
