Londoners are paying almost £4,000 a year in “soaring” service charges as new concerns were raised with Sadiq Khan about the capital’s housing crisis.
A report from the London Assembly on Friday warned that the uncapped nature of service charges threatens to blight supposedly “affordable” shared ownership schemes.
The cross-party assembly called on mayor Sir Sadiq to cap the amount charged in shared ownership schemes built with City Hall subsidies.
Londoners are more than twice as likely as the rest of the country to be leaseholders, as 36.1 per cent of the capital’s housing stock is leasehold.
An assembly survey found that Londoners who were liable for service charges paid an average of £3,912 per year – or £326 a month - with one in 10 spending more than £7,000 a year.
There were reports of a “lack of transparency” over the charges, which are imposed by freeholders.
Some works that were meant to have been funded by the service charges were done poorly or not at all, amid suspicions of charges being seen as fraudulent or a result of “price-gouging”.
The report, by the assembly’s housing committee, said Sir Sadiq should “design down service charges” when the updated version of the London Plan, the mayor’s housing and planning blueprint for the capital, is published next year.
The committee also wanted the mayor to improve transparency in leasehold service charges in London, and called on the Government to legislate to give social renters the same rights as leaseholders in terms of access to full service-charge statements and invoices.
Sem Moema, the Labour assembly member who chaired the housing committee at the time of the investigation, said: “Londoners are being hit hard by increasing service charges, often with no clear idea of what they are receiving in return for their money.
“Worse still, there is no end in sight for these soaring costs, with freeholders and housing associations telling us that service charges are expected to increase further.
“Leaseholders deserve transparency about their costs, but they also need action to bring their expenses down.
“We are calling on the mayor to do his part, by capping service charges on new shared ownership homes and committing to drive down service charges through his new London Plan.”
Harry Scoffin, founder of campaign group Free Leaseholders, said: “Leasehold is a cost of living emergency and leaseholders are sick of being policy lab rats. The London Assembly housing committee have listened.
"We hope this is the last such report before the government brings leasehold to an end, as Labour pledged in its manifesto. Like us, the Committee are calling for the government to expedite commencement of the Leasehold and Freehold Reform Act 2024 ahead of any new commonhold law.
“It’s significant that a Labour-dominated committee is urging London mayor Sadiq Khan to improve his lobbying of central government and establish a commonhold taskforce to take into account London’s needs. It’s imperative that leaseholders in mixed-use buildings, for example, aren’t left behind.
"A year into power, it’s high time the Labour government publishes its plans on ground rent.”
