Our housing correspondent, BARRATT HOLMES, reports on how some of the warnings about the council house-builders’ ‘affordable’ homes are becoming an costly reality in Crystal Palace
Residents in supposedly “affordable” shared ownership homes built in Crystal Palace by the council-owned developer Brick by Brick have been hit with a 35% service charge hike.
Highly charged: Sinead Harmey (right), a resident of Auckland Rise, with her councillor, Claire Bonham
The residents living on Auckland Rise, with the backing of their local councillor, Claire Bonham, have demanded an urgent meeting with Jason Perry, the Mayor of Croydon.
Shared-ownership properties have strictly controlled rent rises but there are typically no similar limits on service charges.
The hike, which is more than 10 times the rate of inflation, was raised with the Mayor by the Liberal Democrat councillor at this week’s Town Hall council meeting.
The block on Auckland Rise was built by Brick by Brick in 2021 and is managed by Metropolitan Thames Valley. Residents are now facing service charges that have risen by more than 80% since the point of sale and are challenging Principle Estate Management to explain the rationale behind the increases.
They also want a full breakdown of charges.
Brick by Brick was set up by Croydon’s then Labour-run council in 2015, supposedly to build more affordable homes in the borough. After £200million-worth of loans from the council, Brick by Brick delivered just three, purpose-built council flats in five years, and its inability to return any profit on its developments or repay its loans and interest directly led to the council’s financial crash in 2020.
The Labour council’s leadership claimed that 50% of BxB’s new homes would be “affordable”. The other half of homes were supposed to be sold for profit.
Yet most of Brick by Brick’s affordable allocation were built with the intention of being sold under shared ownership – even though the company’s managers never registered as a recognised supplier of such properties.
The Auckland Rise development was one of those Brick by Brick shared ownership sites.
Bonham and the residents now refer to the “curse” of Brick by Brick.
“These service charges are a scandal and make a mockery of Brick by Brick’s promise of ‘affordable housing’ to residents in our borough,” said Councillor Bonham.
“Service charges at Auckland Rise are now 80% above what BxB estimated they would be at the point of sale. If the charges continue to increase at this rate, the properties will become unaffordable for residents and unsellable.
“Croydon Council needs to do everything they can to support residents on Auckland Rise and back them in challenging the extortionate rise in fees.
“While I am pleased that the Mayor of Croydon agreed to my request to meet with residents, I am disappointed that he refused to support the LibDem campaign to challenge unfair service charges, introduce commonhold and abolish ground rent.
“The Conservative Government may have broken their promise to end leasehold, but I will continue to call for an end to this out-of-date practice.”
From 2018: Brick by Brick’s shared ownership flats are far from affordable
Read more: How myth of shared ownership has made housing crisis worse
Read more: Feeling the heat as residents are stung with 775% price hike
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