London borough tenants pay three times more in service charges than neighbours

London Tenants Federation uncovers wide borough-by-borough variations in service charges.

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Research by the London Tenants Federation (LTF) reveals tenants in one borough pay on average three times more in service charges than their near neighbours.

And if you’re Islington those near neighbours live in the City of London.

The research was conducted as part of a series of briefings looking at the rising cost of social housing in the capital.

Overall, council rents and service charges combined increased by 77% across London between 2002 and 2018.

In Islington, where tenants pay the highest service charges in the capital, LTF found there was a 97% increase in average overall council housing costs in that time.

In the City of London, where the average weekly service charge is £5.70, LTF saw a 75% increase.

With wide borough-by-borough variations uncovered LTF calls for more transparency from the capital’s councils on how they set their service charges – and greater scrutiny and leadership from Whitehall.

In 2002, most councils charged for services as part of rents.

Since then, Labour’s rent regime offered councils a financial incentive to separate the two, allowing councils to retain 20% of service charges outside of the Housing Revenue Account in the first year, followed by an additional 10% per year in following years.

That meant by 2011/12 many councils were keeping 100% of the service charges.

The Rent Standard Guidance requires that tenants are provided with “clear information on how service charges are set”.

According to LTF, most members report that there is no consultation on service charges and inadequate information to assess whether they are getting value for money.

The LTF’s briefing concludes: “We’re concerned that service charges, now a significant factor dictating overall housing costs (separate to and alongside rents), are being set with minimal control in place and pretty much hidden away from public scrutiny at the national level.”

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