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Understanding your service charges

Service charges are additional costs you may be charged to cover things like buildings insurance, lift maintenance and sewerage.

Annual service charges vary depending on the type of home you live in, as well as by whether you’re a social tenant, private tenant, shared owner or leaseholder.

They’re estimated by looking at the cost of services for a property in previous years and then working out a projected cost for the coming financial year. To help estimate costs, we group properties into blocks or estates and use factors like the number of homes or bedrooms. The actual costs for the year are then measured against this estimate.

Annual service charges are either fixed or variable.

  • Fixed - your payment is a set amount regardless of the year’s actual costs.
  • Variable - your payment changes depending on the year’s actual costs.

If you pay a variable service charge, we’ll let you know the actual annual cost within six months of the end of the financial year. We’ll add or subtract the difference between the estimate and the actual cost to the following year’s charges.

If you have any questions about the service charges please contact us.

Service charge update: September 2020 

In September 2020, we introduced new service charge letters and updated our service charge codes and descriptions. For example, if you previously paid separate charges for block and estate cleaning these now show as one charge for cleaning.

Shared owners and leaseholders

If you’re a shared owner or leaseholder, we tell you the estimated service charge at the start of each financial year. We then update you on what we actually spent within six months of the end of each financial year.

Ground rent

You might also have to pay ground rent to your freeholder. If so, you’ll get a notice of demand before each financial year saying how much you have to pay and whether this will increase over time. The deficit or surplus from this is applied to your account on 30 September each year.

Sinking funds

With some leases, we collect fees for a sinking fund, also known as a reserve fund. Sinking funds are kept in an account that accrues interest and we only use this money when unplanned major works are needed. We’ll let you know how much is in your sinking fund and if we need to use the money.

Service charge update: September 2020

In September 2020, we introduced new service charge letters. This means you no longer receive an invoice with your letter.