In a survey conducted by real estate firm Keller Williams, the strong majority of leasehold homeowners consider service charges unfair, with the lack of transparency cited as a major factor. The consensus amongst the public does not lie within the reluctance to pay them, but rather the vague nature of where the money is actually being spent.
Keller Williams have stated that the costs vary regionally, with London homeowners paying an average of £1,900, in comparison to the South East average of £1,301, The East average of £1,182, and the South West coming in with an average of £1,121. The North East has a juxtaposing figure of £650 however, which could be the eye of the storm in terms of where the issues and disbelief at service charges has started amongst homeowners. Furthermore, Keller Williams says that nearly three-quarters of homeowners did not think it was fair that they were being landed with service charges.
Ben Taylor, CEO of Keller Williams, said: “Service charges are an integral part of maintaining the wider community areas and standards of living in many leasehold buildings and so it’s quite surprising that so many leasehold homeowners believe them to be unfair. Of course, this attitude seems to stem from a lack of transparency on how they are spent, rather than having to pay them in the first place. I think many appreciate that their service charge could increase should there be a substantial maintenance job required. However, this friction point between leaseholder and freeholder could be greatly reduced by placing an emphasis on educating and informing leaseholds as to how their money is being spent.”
Keller Williams said it had obtained these statistics through the research platform Find Out Now. However, a full breakdown of how the statistics were discovered was not made available.
Overall, there is an evident distrust towards service charges, but this has stemmed from a lack of clarity and accuracy of exactly what money is being spent and where. To combat this, more accurate price breakdowns of service charges would help leasehold homeowners to trust the process to the point where service charges would just be seen as a necessary utility moving forward.