Rents and Service Charges blamed for higher housing c...

Housing costs - rents and mortgages - are rising by about 3.6% a year according to a Barclays Bank assessment.

This figure is higher than in recent months but still well below the 6.5% figure at the height of the cost of living crisis.

A survey of Barclays customers also shows that service charges and ground rent increases have become a burden for many affected homeowners, with only 37% of those affected regarding these costs as affordable.

Meanwhile, on top of the high price tag, most leaseholders feel blindsided by the charges, as just 33% recall being made aware of the costs before purchasing their property, and only 23% saying they understood the rate at which the costs would increase.

On top of affordability, level of service is a growing issue as leaseholders claim to see few improvements to their properties despite the premium – only 13% feel they get good value for money, and even fewer (10%) believe the money from their fees is spent effectively. Nearly a fifth (17%) of those paying service/ground rent fees are also concerned they won’t be able to sell their homes because of the charges.

Mark Arnold, Head of Savings and Mortgages at Barclays, says: “Consumers and lenders alike are anticipating a drop in interest rates this year, but optimism is understandably tentative as the market is still feeling the effects of last year’s volatility. Our data shows that Brits are still facing higher rent and mortgage payments, although costs are still slowing down over the longer term.

“Many homeowners have additionally been hit by high service charges in the wake of increased inflation. Prospective buyers considering a leasehold property, especially in managed flats, should ask about these costs early in the process – not just for peace of mind, but also because lenders will want to know about any financial obligations to make sure mortgage payments will be affordable alongside other outgoings.”

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.