Hopefully this is the right forum to post in, if not my apologies.
I am the leaseholder of a 1 bed ex local authority flat in Hackney, London. The block is council owned, and is run by the management company ‘Hackney Homes’ in partnership with Hackney Council. As far as I am aware, there are 4 leasehold properties in our block of 30 units, however for purposes of services and management, we are grouped with a much larger estate. And recent years have seen, what I feel to be, excessive increases in our service charges.
I bought my flat in 2004. Total service charges since then have been as follows:
03/04 - £635.94
04/05 - £855.05
05/06 - £1385.54
06/07 - £1161.86 (estimated)
07/08 - £1844.50 (estimated)
This shows that the charge has trebled in five years, and the increase may be even greater if the latest estimate is too low. The apparent slight reduction in 06/07 is misleading because it is an estimate and could still increase significantly. In any case, this is still a very high figure. How is it possible that charges have risen so much since Council services were privatised? Surely privatisation was supposed to reduce costs, not increase them?
Here are some of the principal charges for each year from 04/05 to 07/08. In each case the last two numbers are estimates and could therefore increase.
Heating and hot water fuel
Heating and hot water has risen by 4781% in 4 years! Block cleaning has risen by 1007% in 4 years, of which 978% is in the last year alone. I would like to suggest that these figures are ludicrous and unsustainable. Heating and hot water fuel alone now costs more than the entire service charge five years ago. Fuel costs have not risen by 4782% in four years.
Further, with respect to heating hot water, these flats require almost no heating as the block is very well insulated. I hardly use the radiators at all, even in winter, as the flat is warm without them. Yet the fuel charge for 1 flat is now estimated at £691.76, which is nearly £21,000 for 30 flats. A quick survey of friends and family tells me no one pays anywhere near that amount for heating. An average being £400 per annum for a 1 bed flat, and it is also of note that we are charged a further £250 for maintenance. If the Council is paying £21,000 in fuel to heat flats that require very little heating, I would like to suggest that the Council is grossly overpaying and this service could be managed very much more efficiently and cost-effectively. With respect to cleaning, the quality of estate cleaning is currently low. It has certainly not improved by 978% in the last year.
It is clearly unacceptable that a one bedroom flat in a small block of 30 flats and valued at approximately £140,000, a very low amount in Hackney, should now attract an unfairly exaggerated service charge of £1844.50. I agree that it is fair for leaseholders to pay their share, but that does not mean they should have to pay an unfair amount. Who can say for certain that these costs are fair? Have they been correctly calculated? Are services being mismanaged and leaseholders overcharged? 4 flats in the black are leasehold, which means the other 26 flats are owned by the Council. If there is mismanagement of services, or incorrect accounting, this could mean Council taxes also being wasted in the management of the 26 Council-owned flats.
Finally, I have checked with local estate agents. These figures are very greatly in excess of service charges levied by private landlords in private blocks in this area. This would clearly indicate that the Council's service charges cannot be justified. I would like to know how private landlords can manage their services more economically than the Council.
I have attached a complete breakdown of estimated and actual costs.
I hope this post isnt too long winded, but I felt it prudent to fully outline my concerns. If anyone can provide any advice or assistance, it would be greatly appreciated.