More than two-thirds of tribunal cases reduced or removed service charges in 2024

The campaign group believes this research “represents the tip of a very tall mountain” because only a very small proportion of service charge disputes ever reach the courts due to difficulty for residents in accessing the legal justice system.

The Regulator of Social Housing’s (RSH) latest Global Accounts for the end of March 2024 showed that housing associations collected £1.9bn in service charges from tenants and residents in the 12-month period.

This represents a 15.8% jump in service charge income over the same period in the previous year.

The RSH said: “Increases in service charge expenditure are widespread, reflecting higher costs for labour, materials and building maintenance.

“Providers with a significant presence in the care and support sector tend to have relatively higher service charge costs and reported the greatest level of increase year on year.”

Suzanne Muna, co-founder and secretary at SHAC, said: “Our research and the regulator’s report both underscore the need for the government to freeze rents and take action to end service charge abuse for renters, as well as shared owners and leaseholders.

“Housing costs are rising out of all proportion to pay rises, and are driving people into debt and despair. SHAC is campaigning on rents and service charges, and urges all to support our action.”

SHAC has called on the government to freeze rents and cap service charges.

At the end of last year, the Shared Ownership Council (SOC) launched a pilot for a voluntary code, with housing providers taking part required to make sure service charges are transparent and affordable for customers.

The scheme comes after a national consultation, which drew responses from more than 1,700 current and prospective shared owners, as well as lenders and housing providers.

SOC is a cross-industry body focused on improving shared ownership and expanding the market. Its backers include Lloyds Bank, Leeds Building Society, L&Q, LiveWest, Platform Housing Group, L&G Affordable Homes, Heylo and Clarion.

SOC plans to launch the code this year. However, it declined to comment on this research. 

The Ministry of Housing, Communities and Local Government (MHCLG) also did not respond to the findings.

Questions have been raised in a number of reports into shared ownership about its affordability over the last two years, including uncapped service charges, and it is an issue that has been raised in sector conference sessions.

The former chair of the Levelling Up, Housing and Communities Committee has said grant could be switched from shared ownership to social rent and he is “sceptical” about the future of the product as a part of the government’s affordable housing plans.

Inside Housing has asked MHCLG whether it still considers shared ownership an affordable tenure and therefore should be subject to grant funding.

An MHCLG spokesperson said: “Far too many residents across the country are being asked to pay unreasonable and extortionate charges.

“That’s why we will consult this year on plans to give leaseholders greater rights and protections over their homes, and deliver greater transparency to leaseholders on the charges they pay.

“Shared owners will benefit from various reforms already in progress through our wider leasehold and renters’ rights reforms, and we continue to look at ways to improve their experience.”

Internal emails between MHCLG and Homes England, published in November, revealed they were left “taken aback” and “unimpressed” by an MP-led inquiry into shared ownership.

The report published last year called for “urgent” reforms to the product after the inquiry found uncapped service charges, rising rents and unfair maintenance costs meant it was unaffordable.