Housing associations are facing allegations of mis-selling so-called “affordable” homes, with service charges that have soared by more than 400% in some cases after residents moved in. The Observer has examined marketing and property documents which reveal that buyers who may be struggling financially are enticed to buy shared ownership homes with estimated monthly service charges as low as £120. However, residents accuse housing associations of failing to accurately reflect the likely cost, which has risen to more than £650 a month in some cases.

Shared ownership allows individuals 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. However, in recent years, the service charge has risen dramatically and will be £706 a month from April.

Residents’ campaign group Social Housing Action Campaign is planning legal action over the escalating service charge scandal, which affects tenants in social housing, residents in shared ownership homes, and other leaseholders. Housing associations have built and sold more than 100,000 shared ownership homes in the last decade, but residents accuse them of negligence as they sold homes with service charges that were described by the government in certain instances as “unreasonable and extortionate.”

Source: https://www.theguardian.com/society/2025/mar/09/uk-housing-associations-accused-of-mis-selling-affordable-homes-as-service-charges-soar-by-up-to-400