In South London, shared ownership residents are grappling with skyrocketing service charges that threaten their financial stability. Marco Scalvini, a lecturer and first-time buyer, recently moved into a shared ownership flat within a new development. The property, which features luxurious amenities like a concierge service and landscaped gardens accessible to the public during the day, has become a source of distress for Scalvini and his neighbors.
Having met the criteria for affordable housing, Scalvini initially felt fortunate to secure his flat. However, his optimism has been dampened by a staggering 77% increase in service charges, rising from £4,500 in the 2023/24 fiscal year to £8,000 in 2024/25. This surge has raised doubts about his ability to remain in the property, as the council's planning agreement mandates that housing costs should not exceed 40% of a resident's income after tax.
The housing association Peabody, responsible for managing the affordable flats, has attributed the increase to maintenance costs passed on from Rendall & Rittner. Scalvini expressed frustration at Peabody for failing to acknowledge the financial strain these charges impose on shared ownership residents. He is concerned that he may ultimately be forced to sell his home due to the unsustainable costs.
“It is driving me out of my mind. Everyone is in the same situation,” Scalvini said, highlighting the collective anxiety among residents. He further criticized the inequity in treatment between affordable and private residents, stating, “It is a total injustice … we are subsidising the services for private residents … it is outrageous.”
A significant point of contention for Scalvini and other residents is the existence of a "poor door," an entrance designated for affordable housing residents that is separate from the gated entrance used by private residents. “Our entrance is on the street at the back of the building. The private residents’ entrance has a concierge. That’s a textbook definition of a poor door,” he remarked.
The financial pressures have resulted in Scalvini’s household income now exceeding 40% towards housing costs. He noted that to live comfortably within the area without exceeding this threshold, individuals would need to earn between £80,000 and £90,000 annually. “Everyone in the block is spending more than 40% of their incomes on housing. It is shocking,” he added.
As acting chair of the newly formed residents association, Scalvini has taken it upon himself to advocate for his neighbors. Despite receiving letters and text messages demanding payment for the increased service charge from Peabody, he feels that the association's concerns are being overlooked. While Peabody has offered a payment plan for the initial adjustment of 2023/24 charges, Scalvini argues that this does not address the systemic issues faced by residents.
“They insist they treat us all equally but they are denying reality,” he stated, urging Peabody to represent the interests of affordable housing residents more effectively. Scalvini insists that these charges are unsustainable and calls on Peabody to take action on behalf of those who are struggling to make ends meet.
Helen Dennis, cabinet member for new homes at Southwark council, emphasized the council’s commitment to ensuring that homes remain genuinely affordable. “We want homes to be genuinely affordable to residents and support leaseholders in negotiations with their landlords to ensure charges are fair and available for scrutiny,” she asserted.
A spokesperson for Rendall & Rittner acknowledged the challenges posed by rising service charges but reiterated their commitment to keeping costs reasonable. “At all our developments, we strive to keep service charges as reasonable as possible as we understand the pressure this puts on leaseholders,” they stated.