Marco Scalvini, a lecturer, initially felt fortunate to secure a shared ownership flat in inner London but is now facing financial distress due to a 77% hike in his service charge by Peabody, the managing housing association. Moving from 4,500 to 8,000 pounds, Scalvini struggles to afford this increase alongside a back payment demand of 3,000 pounds. The issue highlights broader concerns about the management of affordable housing, where councils can ensure initial affordability but lack mechanisms to prevent later price hikes by private companies, making such homes increasingly inaccessible to low- and middle-income residents.
Like other councils, Southwark insists developers sign up to planning agreements to ensure residents in affordable homes do not spend more than 40% of their household income after tax on housing costs, including service charges.
Scalvini, who is the acting chair of the block's newly formed residents association, says the affordable flats in the development are now beyond the reach of people on low and middle incomes.
I'm already struggling, he says. They have offered me a payment plan, but that's just for the adjustment. Then there is the permanent increase in my service charge.
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