Reply To: Housing in London: damp, mould and high charges


Sylvia Morris, a former headteacher who describes herself as a “nitpicker”, says residents have to be “tenacious and strong minded” to chase proof of costs and services.

Despite visiting Peabody’s offices to examine the accounts of a recent bill, Morris says she still does not fully understand why her service charge has surged from £795 a year in 2018 to £1,530 in 2022. That year, Morris says, her block was issued with additional charges for repairing faulty guttering. The guttering still leaks, she adds.

Several residents say they feel trapped in properties where service charges are spiralling out of control. 

Dennahy, a video editor, says he was charged an additional £2,400 and £1,700 for the financial years ending in 2021 and 2022 respectively, charges he thinks are unjustified and feels powerless to challenge.

After pushing for a cost breakdown from Peabody, Dennahy realised his block was charged more than £30,000 a year for landscaping and ground maintenance in those years. “All our plants are dead,” he says.

He is now “one invoice away” from not being able to pay and says Peabody has verbally threatened to inform his mortgage provider if he falls behind on service charge payments.

He added: “What boggles our brains when we think about it is that Peabody is supposed to be a housing association, they are supposed to be there for the people that need help.”

In its statement, Peabody said: “We’re reviewing how we set and collect service charges and have formed a task force to deal specifically with service charge queries. We have also created new roles to boost our resources in this area.”

Commercial vs social priorities
Complaints of neglect levied against Peabody illustrate how housing associations have become further removed from their social purpose.

Large scale voluntary transfers of social housing stock under Margaret Thatcher’s premiership in the 1980s from local councils to housing associations — which later amalgamated — enlarged associations, leaving local residents feeling like they were out of touch.

As funding cuts for new social homes and bank loans dried up in the wake of the global financial crisis, housing associations turned to corporate bonds and the private market to fill the gaps.

“We are not a country where people on low income can afford anywhere decent to live. That’s the issue,” says Polly Neate, chief executive of the housing charity Shelter.

Consolidation in the sector has made the problem worse. “You have to look at the drivers of that,” says Neate. “A lot of housing associations are struggling to make ends meet financially, it’s tragic that a lot of small and medium housing associations that are closer to their social purpose get swallowed up by larger, more commercial bodies.”

Housing associations’ willingness to develop their existing stock has been clouded by concern for how this would impact their credit score and standing in the eyes of lenders, according to Professor Stewart Smyth, chair in accounting at Sheffield University Management School. 

“There’s a tension between being commercially minded and socially hearted,” he says. “The tendency over the last 30 years has been more and more towards commercially minded. That’s the funding environment and the policy environment they operate in.” 

Housing associations also adopted intricate group structures, according to Smyth, morphing into spider webs of registered charitable units, joint ventures and public limited companies.

Peabody Trust now has 14 subsidiaries — excluding those gained through amalgamations and takeovers — and 11 joint ventures, including with property developers.

These complex structures inevitably shift housing associations away from their founding missions, Smyth says. “You see that in terms of the financings, amalgamations, takeovers . . . that starts to take away from social aspects which are about local communities and local people.” 

As frustration swells among residents about the state of their home or the charges they pay, a number have escalated their concerns beyond the Peabody complaints system to join residents’ associations, lobby local MPs or challenge charges in courts.

Many other housing association residents have been forced to do the same. Fleur Anderson MP, a Labour MP for Putney in south-west London, says she has met two chief executives of two different housing associations in the past month alone, to push for “urgent repairs” to homes in her constituency after “months of inaction”.

“It is simply unacceptable,” she says. “There is a lack of accountability which leaves many residents in poor quality housing with nowhere to turn.”

Bringing complaints through the legal system is an expensive process, with residents often quoted tens of thousands of pounds for legal representation.

Others feel like the only solution is withholding payment, but advisers and lobby groups have warned that this comes with risks. “If you get taken to court and you’re found in breach of lease, you’ll get crucified in legal costs,” says Sebastian O’Kelly, director of Leasehold Knowledge Partnership, which lobbies for leasehold reform.

One Peabody resident, who ceased paying service charge payments after noticing what they described as costs that were “quite grossly financially inaccurate” and “unfulfilled”, says Peabody got a county court judgment invoked against them. A sum of almost £10,000 on top of legal costs was demanded, according to a copy of the judgment, seen by the FT.

Some residents say speaking to the FT was the only way to hold Peabody to account with their initial faith in the housing association slowly worn down. 

“It’s not just frustrating, it’s exhausting. As a resident, our voices are not heard. When we have a concern, it’s swept under the carpet,” says one, who has been dealing with mould, leaks and a cracked kitchen ceiling for a year. 

“We support action to encourage and make it easier for residents to raise issues with us,” Peabody said in a statement. “We are listening, and ensuring we identify every opportunity to make things right, learn lessons and improve our services.”

Improvements could not come soon enough for the Peabody residents who say their experiences have profoundly marked their lives.

Williams, the kung fu instructor, recently moved back into his Islington flat. Peabody said it arranged accommodation for Williams while his home was being repaired and had offered him further assistance.

But he says several repairs, including damage to windows and smoke detectors, have still not been completed, while his personal belongings have been damaged by contractors.

“No one wants to take responsibility,” says Williams. “When you ask for anything, they give you nothing.”