Residents who purchased shared-ownership properties marketed as affordable homes are now feeling trapped as they are spending more than half of their net salaries on mortgage repayments, rent, and service charges. Campaigners are arguing that residents have become victims of financial abuse after being hit with dramatic increases in service charges, with some facing annual costs exceeding £5,000. Some residents are struggling to meet these rising expenses.
L&Q, one of England’s largest housing associations, advises that mortgage, rent, and service charges should not exceed 40% of net take-home pay, but many residents in L&Q homes are paying over 50%. Shared-owners are responsible for all repair costs and service charges, leading to a lack of clarity and a feeling of financial abuse.
A parliamentary inquiry highlighted that shared-ownership homes are failing to deliver affordability, with residents facing difficulties selling their shares once costs become unaffordable. L&Q residents at Braeburn Mansions in London were recently hit with unexpected service charge increases, adding to their financial stress.
Melody Barreau, a resident at Braeburn Mansions, shared her experience of feeling trapped by rising costs, with her annual service charge standing at £3,700. L&Q faced criticism for a past advertising campaign promoting shared-ownership homes with short deadlines, and concerns have been raised about the transparency of potential cost increases.
L&Q has acknowledged the pressures faced by residents and is working to provide more control and transparency over service charges. The Ministry of Housing has pledged to implement reforms to increase transparency and protect homeowners from unjustified cost increases.
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