Soaring service charges mean 'affordable' housing is being mis-sold, say residents

Anger over estimated costs in marketing documents that have since risen fivefold

- Jon Ungoed-Thomas & Tom Wall

Housing associations are facing allegations of mis-selling so-called "affordable" homes, with service charges that have soared, in some cases by more than 400%, after residents moved in.

Marketing and property documents seen by the Observer reveal how buyers who may be struggling financially are enticed to buy shared ownership homes with estimated monthly service charges as low as £120. Residents accuse housing associations of failing to accurately reflect the likely cost, which in some cases has risen to more than £650 a month.

Shared ownership allows people to buy a proportion of a leasehold property, with buyers required to pass checks to ensure they have a low enough income to qualify and can afford the payments.

When Patrick Duffy, who works in an art gallery, moved into his shared ownership property in Dalston, east London, the service charge was about £95 a month. In recent years, the service charge on the property in Martel Place, marketed by One Housing now the Riverside group has risen dramatically, and will be £706 a month from April.

Duffy, who bought the home with his partner in 2017, considers the property was mis-sold. He said: "It's wildly unaffordable and I might have this flat for the rest of my life because it's not sellable on the open market."

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