Large newbuild estates and buildings can be complex and expensive to maintain, but a concern among some is the lack of transparency. Leaseholders have complained about hefty bills with little detail or unexplained demands for eye-wateringly high sums.
The Leasehold Advisory Service says that of the 33,000 people have gone to them for advice in the past five years, it has received more complaints about service charges than any other subject.
However, industry insiders argue that there are legitimate reasons for rising charges, including the repercussions of the Covid-19 pandemic, as well as the fallout from Brexit.
“We have seen significant inflation in recent years, as well as extensive material cost increases following the Covid pandemic. This ultimately translates into higher service charges,” the RFA said in a statement.
Jaclyn Mangaroo of the Property Institute, a professional body that represents managing agents in England and Wales, is among those arguing that Brexit triggered an increase in costs. Some say exiting the EU has led to labour shortages in the industry.
Mrs Mangaroo also points out that the Grenfell fire tragedy has seen insurance charges rise, which in turn pushed up service charges.
However her organisation wants managing agents to be regulated to prevent what she calls “abuse” of the system. Its members are properly trained, she stresses, “but there is no oversight or accountability for those outside the membership, for everybody else that’s operating”.
Last week the housing minister has announced they would regulate managing agents but added they need to consult on this first.
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