‘Heating Hostages’ – Leaseholder Heating Charges

Southwark have just issues the service charge estimates for 2023/4, as detailed below.

Leaseholder Heating Costs

The vast majority of the service charges relate to district heating, currently forecast at £2,960.18 for a two bedroom property.

This contrasts massively with the charges being levied on tenants, as detailed below.

Tenant Heating Costs

Tenants are asked for an annual charge of £1,377.48 (£26.49 x 52 weeks) for a two bedroom property.

Huge variance in charges between tenants & leaseholders

These charges represent a 211% premium being asked of leaseholders.  Leaseholders are being asked to pay an extra £1,582.70 for heating an identical property. This is despite leaseholders being told that they just pay their ‘fair share’ of heating costs.

The above figures also exclude the 10% premium added to service charges, and also does not reflect that the tenant charge is supposed to cover the ongoing maintenance of the system, whereas leaseholders are expected to pay towards heating upgrades via major works contracts.

If leaseholders are paying their ‘fair share’ of heating & maintenance costs, then Southwark must be spending the same amount on behalf of tenants, maintaining these ageing district heating systems. Surely the ongoing burden of haemorrhaging money on an annual basis makes no sense for leaseholders, or for Southwark (covering the maintenance costs for the tenanted properties)

The cost to heat a 2 bedroom flat in Southwark exceeds the national average of heating a 5 bedroom detached house. How can this make any sense?