About service charges
If you’re a leaseholder, you’ll receive a yearly service charge bill. The service charge covers the cost of providing services to your block and estate, such as grounds maintenance, minor repairs and lifts. The charges will be split into estate and block costs.
- Service Charge Estimate 2023-24 and Service Charge Actual 2022-23
- What service charges cover
- How we calculate the charges
- Services provided
Service Charge Estimate 2023-24 and Service Charge Actual 2022-23
Service charges represent a share of our costs of providing and maintaining services to your block and estate. You're required to contribute towards these costs under the terms of your lease or, if you're a freeholder, your transfer part.
Before the start of the financial year we send you a reasonable estimate of the amount we expect the service charges to be. You should pay these estimated charges in advance on 1 April, 1 July, 1 October and 1 January. Alternatively, we accept 12 monthly payments from April to March.
After the end of the financial year, we prepare our final accounts with details of what was actually spent on providing these services to you. If we have overestimated the charges, you'll receive a credit on your account, but if we've underestimated the charges, you'll receive an invoice for the extra charge(s). The actuals billing run for the 2022-23 financial year took place on 22 September 2023.
Freeholders aren't sent estimated charges and are only invoiced after the end of our financial year, once we've finalised the charges for the actual billing.
Your service charges are defined by your lease and by Section 18 of the Landlord and Tenant Act 1985.
What service charges cover
The communal services you receive vary according to where you live and the type of property you own. For example, if you live in a flat on an estate, you'll receive more services than if you live in a flat within a street property. The services that apply to your home are shown on the breakdown sent with the invoice.
Where a service is provided to both your block and estate, we have shown a separate breakdown of the charges for each. A list of the services that may be provided by the council is detailed below, together with an explanation of how we calculate the costs.
How we calculate the charges
All calculations have been based on the cost of providing the service to your block and estate except where stated in the following sections.
For all services we base the charges on the size of your property.
- We assume that each property has four basic rooms, which we call units – bathroom, kitchen, living room and hallway.
- We then add the number of bedrooms to come to a total number of units for each property. For example, a one bedroom property has five units, while a three bedroom property has seven units.
- We divide the cost of providing services to a block or estate by the total number of units in the block or estate to give a cost per unit.
- This is multiplied by the number of units in your property to come to your charge. This means that the owner of a three bedroom flat will pay more than the owner of a one bedroom flat in the same block.
When calculating your actual cost, if you bought your home from us between April 2022 and March 2023, we've worked out the charges from the date of your purchase to 31 March 2023. If you bought your home from another leaseholder, it's your responsibility to liaise with the previous owner about the excess charge or credit.
Care and upkeep
This charge is for the cleaning and upkeep of external and internal communal areas such as balconies, corridors and lifts as well as walkways on the estate. It is based on the hours the contractor’s staff spend cleaning your block and estate. It also includes the provision where appropriate of refuse containers, delivery of refuse sacks and multi-level collection of refuse, which is separate from the refuse collection service paid through your Council Tax.
We've shown separate charges for your block and estate in the breakdown enclosed within your billing pack. Your housing services office or Tenant Management Organisation (TMO) monitors the standard of cleaning and has regular meetings with the cleaning managers and residents to resolve any issues raised by the residents.
Estate grounds maintenance
This charge is for maintaining communal land on estates including flowerbeds and grassed areas. It can include a charge for the maintenance of trees on your estate. The charge is based on the hours the contractor’s staff spend maintaining your estate. Your housing services office or TMO monitors the performance of the contractor.
Lighting and electricity
This charge covers the maintenance of lamp columns and replacement of light bulbs on your block and estate. It includes the cost of electricity supplied to all the lighting, including entrance halls, balconies, stairwells and on the estate grounds. We've based your electricity estimate on the latest bills paid plus an uplift that recognises the current market rate increases. When available we include any expected cost of testing the electrical supply equipment in your block. When we actualise the in-year spend during the six months following the end of the financial year, the actual cost is calculated and any adjustments are reflected in your actual bill for the year.
This charge covers the provision of a communal television aerial to your block, if it is provided. The charge is based on an adjusted average of the costs for the last three years for estimates and once the true cost spend has been calculated then this is reflected in the actual bill within six months of the financial year end.
Where provided, the door entryphone charge covers the cost of its repair and maintenance. The charge is based on an adjusted average of the costs for the last three years. This may also include any estimated refurbishment costs to your door entryphone system, and then adjusted for the actual cost six months after the financial year end.
We provide heating and hot water to some blocks and houses. The heating charge is based on the cost of running the boiler house and plant rooms serving your property and is made up of a number of different elements:
- The amount of gas used
- An annual contract sum for planned and preventative maintenance – making sure that all equipment is regularly serviced and in good condition
- Electricity to power the boiler house and plant room
- Reactive repairs – costs which fall outside the main contract. These will consist of repairs in the boiler house as well as repairs to heating and hot water systems in individual properties (non-boiler repairs)
- Direct and indirect management costs – the cost of heating engineers and officers who manage the district heating contract.
The costs of running the boiler and the plant linked to the boiler house are added to give a heating estate cost. This total amount is divided between each property receiving heating and hot water from that boiler house based on the calculation explained above. The cost of repairs to the heating pipes and radiators in the block are apportioned to all properties in the block. We also take into consideration whether your property has partial heating or full heating. Our own heating engineers manage the heating contractors.
The charge is based on the contract cost for planned and preventative maintenance, an average of the last three years’ adjusted repairs costs, and gas and electricity costs based on the previous year’s bills paid, plus an extra amount that includes the current market rate increases.
The market increases are those that our suppliers have advised that they expect to see over the next year and will increase more than in previous years. Due to sharp increases in wholesale energy prices, most suppliers now charge the maximum allowed under the government’s domestic energy price cap. However, although the rates that we pay for gas have increased substantially they are still well below the new energy price guarantee levels, and the estimate reflects this.
Our own heating engineers manage the heating contractors.
We look after your lifts, making sure they are in good repair. We use a contracted company to maintain the lifts. The current contract includes a monthly maintenance check and allows for the contractor to be paid for each call out.
Lift costs are made up of:
- annual planned and preventative maintenance measures, to ensure that all equipment is regularly serviced and in good condition
- reactive repairs – costs that fall outside the main contract
- electricity – to power the lifts
- lift monitoring (phones/alarms) and lift inspection costs, which are a requirement of our lift insurance policy
- direct lift management and other overhead costs (lift monitoring engineers).
The first four costs are based on the lift(s) in your block, but the last cost is divided across all lifts in the borough using our bed weighting method explained above. Our own lift engineers monitor the performance of the lift contractor.
The charge is based on a contract maintenance cost and an average of the last three years’ adjusted repair costs to your block.
If your block benefits from extra security measures such as a concierge or CCTV, then we'll charge you a percentage of the costs of these services. We've given a higher weighting to blocks where the concierge is located.
The charge is based on the last year’s adjusted charge. For the 2022-23 actuals we've given a higher weighting, of 30 per cent, to blocks where a concierge is located, as they receive extra services which aren't received by other blocks, which only have CCTV and security services.
We're required to make repairs to the structure and communal parts of a building or repairs to the communal parts of an estate. This charge will also include maintenance to any water tanks provided in the block and pest control measures taken in the block. It's not possible to predict the number or nature of repairs that will be necessary during the coming year, so we've based the charge on an adjusted average of the last three years’ costs. The water tanks and pest control costs are based on last year’s adjusted actuals.
We've cyclical programmes for repair and work to repair estate roads and pathways. Where it's anticipated that this work will affect your block or estate, the average costs have been adjusted to reflect the additional costs that will arise from this work .
Once we have finalised the charge for the year, you can request a repair to the external part of your block or to a communal area, or by:
- sending an email to email@example.com,
- accessing your MySouthwark account to report and track your housing repairs
- telephoning our repairs service on 0800 952 4444.
Any repairs to the internal parts of your home are your responsibility.
As a leaseholder you're encouraged to arrange home contents insurance for your personal belongings, which aren't covered under the current building insurance policy. Under the terms of your lease, we insure your flat and the building against a range of risks. If you own an underlease house, you're responsible for arranging your own building insurance.
The insurance premiums are based on the number of bedrooms in the property, property type and the total height of the building, as in the current contract. Your estimated charge for 2023-24 has been calculated by increasing the 2022-23 premiums by 11% as per the inflation rate in November 2022.
In 2022-23 the charge was based on the number of bedrooms, the type of property and the height of the building. It includes insurance premium tax, payable to the government, and an index linked increase of 4 per cent.
More details of the current building insurance policy for home owners, including a summary of cover and how to request a claim form.
Overheads are the costs incurred by us in providing individual services. An amount for overheads is included in the charge for the services listed, as it is a part of the cost of providing a service. This is the cost of staff who manage the services and are for salaries and associated administrative costs.
We charge you a fee for administering your service charge account. This amounts to 10% of the total of your service charge as outlined in your lease (third schedule). This fee covers costs over and above those already explained, including:
- staff and office costs incurred in relation to the administration of service charge accounts
- the calculation, billing and collection of service charges
- providing information about your service charge account and general information on all aspects of homeownership
- the administrative and IT costs of calculating and sending you invoices and accounting for payments made.
The administration fee is different to the direct and indirect management costs for individual services - these are covered under overheads, as detailed above.
Tenant management organisations (TMOs) have a different arrangement for payment of their administration costs.
If you own a flat or maisonette, you're required to pay a set annual fee for renting the ground from the council. This is set out in your lease.
Tenant management organisations (TMOs)
For properties managed by a TMO, charges are based on information provided by the TMO for services they provide. These services can include care and upkeep, grounds maintenance, estate lighting and repairs. The estimate charges are based on the actual costs of providing these services to your block or estate for the previous year actual plus a small increase for inflation. Where we provide a service, we've calculated the cost as explained in the previous sections.
For the 2022-23 year actual costs were calculated based on providing these services to your block or estate in that financial year.
Page last updated: 25 September 2023