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Understanding your charges

2024 - January, Our news

Understanding your charges in 2024/2025

We'll be writing to you at the end of February to let you know your new charges for the year ahead. As in previous years your charge is based on our best estimate of costs that we will incur, and your paperwork will include a breakdown of your charge by each service we provide.

Our aim is to be consistent in how we charge you for the services we provide. There may be times however where things look a little different to what and how we charged you last year, and the price we pay for our services continues to go up in most areas. There is some good news on energy pricing though as the wholesale prices have fallen since last year.

Ahead of you receiving your new charge we thought it would be useful to look at some of the changes that will affect your charge in 2024/25. It’s important to remember that each of these areas will have a different impact dependant on where you live and what services you receive.


Energy

Firstly the good news…..the price we pay for energy has significantly fallen from last year and this means we’ll be charging you less for the energy used in communal areas. This includes any heating, lighting, and powering equipment such as lifts, door entry systems and fire safety equipment.

If you’re on a heat network, we’ve already been discounting your personal charge in 2023/24 as we applied for additional government support. If this affects you, we’ll have written to you in December 2023 explaining the position and how we will calculate the final charges for 2023/24. Your charge for next year is based on the new price we pay for energy and the amount of energy used at your scheme.


Cleaning and grounds maintenance costs

These costs are at the heart of the services we provide, and it is important that these costs reflect the services we provide to you. In recent years we’ve re-tendered these services, and many residents will have seen a change in contractor.

We’ve reviewed how we allocate these costs on a scheme-by-scheme basis and this means that some residents may see a bigger than expected increase in charges. Where this is the case, it will be because we have carried out a review of the services and set a new charge that reflects the actual services being provided by our contractors.

 

Bulk rubbish removal and pest control

Over the last few years, we’ve seen an increase in the amount of bulk rubbish that we need to dispose of and this in turn can lead to unwanted pests. Our costs in this area have increased and we’ve had to put up the charges in this area. Not everyone will be affected, and for those who are, we’re doing what we can to manage the position where you live. 

 

Building Insurance

If you’re a homeowner, it is likely we’ll charge you for buildings insurance. Unfortunately, there’s an increase this year in both the amount we charge you and the insurance excess if you need to make a claim. The housing sector has seen an increase in the insurance premiums due to the costs of building supplies and contractor labour rates, this together with an increase in insurance claims means that our insurer has unavoidably had to increase their premiums to us.


Our management fees

This fee covers the cost of our own staff to manage the contractors we use and other administrative tasks on a day-to-day basis.

It includes monitoring our contractors to ensure they are performing to the standards we set out and are attending to the estates as agreed. It also includes the administrative tasks such as making payments to them and other checks on things such as ensuring they have the correct insurances in place.

The fee also covers the costs of dealing with general queries from you, the costs of our teams who produce the service charge budgets each year, monitor the costs, produce year end statements where required and ensure all income collected from you is correctly allocated and used in accordance with providing the services. Other costs covered include the provision of IT services, human resources and legal services relating to service charges.

Three years ago, we introduced a new fixed fee for management fees, we consulted on this at the time, and it is in accordance with best practice across the sector. The advantage of a fixed fee is that it reflects the actual costs of our management and is not linked to the amount we pay for services and a percentage of this added on top.

Your current charge reflects our structures and costs from three years ago and these were also discounted against our actual internal costs. We’ve reviewed this charge and unfortunately there is an increase in what we need to charge you. This is because our internal costs have increased over the last three years, and we have taken the decision not to subsidise these costs moving forward. We do not profit from these fees.


Managing agent fees

PA manages most of the schemes and areas where you live directly.

We do however also pay third party managing agents that manage some of the schemes. These costs in recent years have increased and if this trend continues, we will need to pass the increase on to you. There is often a delay in us receiving information from the managing agents and so sometimes we need to estimate the charges to you. If this is the case, we’ll make you aware. When we receive the final estimates from the managing agents if we find the charges are lower than our estimate, we’ll amend your charges as soon as possible.

 

Frequently Asked Questions

We've put together some useful information and answers to common questions which we hope you'll find useful.

  • What does my service charge cover?

    Depending on the type of property you live in, you may need to pay a service charge.

    Service charges are payments made by you to cover the costs of providing communal services where you live.  

    If you rent your home, the service charge includes the cost of things like:

    • grounds maintenance
    • cleaning of communal areas
    • cleaning of communal windows
    • maintenance of lifts, door entry systems, fire alarm systems, and emergency lighting
    • communal electricity, gas, and water
    • other services that will be listed on your service charge estimate.

    In some cases, there may also be staff costs, such as a caretaker.

    The full list of services you receive will be included on the information we send you each year.

    If you are a homeowner, you will also pay for day-to-day repairs to the building and communal areas.

  • What is a variable service charge?

    At the start of each financial year, we set a budget, which is our estimate of the likely costs that we need to recover from you for the services we provide.

    At the end of the financial year, we review the actual costs against the budget and provide you with a yearend statement. This is usually issued by the end of September every year.

    Any underpayment, known as a deficit, is charged to your account. Any overpayment, known as a surplus, is credited to your account.

    You have the right to challenge the variable service charge amount based on whether you think the charge is reasonable, or on the quality of the service you’ve received. Information on how to do this is included with your notification letter.

  • What is a fixed service charge?

    At the start of each financial year, we set a budget, which is our estimate of the likely costs that we need to recover from you for the services we provide. 

    At the end of each year if the actual amount we spent on providing the services is more than our estimate, we will be responsible for the difference. You will not be asked to pay more. If we spent less than our estimate, as the charge is fixed you will not receive a refund. We do not provide a yearend statement to you as the charge is fixed.

  • How do I know if I pay a fixed or variable service charge?

    If you are a homeowner, you’ll pay a variable service charge, this includes if you purchased a share of your property through shared ownership. Paying a variable charge is included in the terms of your lease or transfer agreement and will set out the basis of how we charge you.

    If you rent your home, you may pay either a fixed charge or a variable charge. Usually, the longer you have lived in your home the more likely it is you will pay a variable charge. All new tenancies from 2017 are on a fixed charge.

    The paperwork we send you will clearly show whether your charge is fixed or variable.

  • How do we estimate the charges to you?

    We use a combination of known contracted costs, for example cleaning and grounds maintenance contracts, and previous costs of metered services like electricity. Some contracts will be linked to inflation rates such as the retail and consumer prices indexes so we’ll know in advance how much prices will go up by.

    For some services we need to estimate what services will be needed in the year. For example, the removal of rubbish due to an increase in fly tipping or damage to trees caused by storms. These costs are often charged to us on an ad-hoc basis by our contractors and will vary each year. We try our best to charge a reasonable estimate for these based on our knowledge of where you live.

  • Why are my service charges so high?

    The prices we pay for services has increased significantly in recent years due to our supply chain passing on higher costs and increases in the cost of gas and electricity. These are beyond our control, and we need to pass on these costs in the charge we make to you. We don’t add anything else onto this other than recharging the costs of managing these services and we don’t make a profit on service charges and only charge what it costs us. 

    We know the cost of living is high for everyone and we’re here to support you if you need it. Our Tenancy Sustainment Team can provide you help and advice if you’re struggling financially. You can find out more and contact them here.

    Find out more

  • Why is my service charge different to my neighbour?

    Usually, you pay a share of everything where you live even if you don’t personally use some of the services. For example, you pay for lift maintenance even if you never use the lift in your building or you live on the ground floor.

    There may be occasions where your lease or tenancy agreement states you’re required to pay a different amount.

  • How do you charge me for the costs of energy where I live?

    Depending on where you live you may be charged for communal energy costs and for personal heat or hot water for your own home, or both.

    The communal charges include the costs of light, heat and supplying power to lifts, door entry systems and fire alarms and other equipment. We charge for this based on the standard unit of consumption, called kilowatt hours, and the estimated usage for each year, together with the unit price we pay and any standing charges.

    Where we provide heat and hot water to you through a heat network, again we calculate the overall charge based on usage and unit prices. Depending on the type of heat network where you live will mean you either pay for the energy you personally use if a sub meter is installed, or you may pay a share of the overall cost. Unfortunately, not every building is suited to the installation of sub meters, and this means that the share you pay may not reflect the energy you actually use. We know this might not always seem fair.

    With energy prices increasing in the summer of 2022, we were able to access discounts from the government. Where have received these, we have an obligation to pass these through to you as the end user. This will be the case where the price we have paid, including the discount, is lower than our charges to you. If this affects you, we will have already written to you.

  • How do I know what is included in the service charge headings on my statement?

    You can find an explanation of the charge here.

  • What is included in my management fee?

    This fee covers the cost of our own staff to manage the contractors we use and other administrative tasks on a day-to-day basis.

    It includes monitoring our contractors to ensure they are performing to the standards we set out and are attending to the estates as agreed. It also includes the administrative tasks such as making payments to them and other checks on things such as ensuring they have the correct insurances in place.

    The fee also covers the costs of dealing with general queries from you, the costs of our teams who produce the service charge budgets each year, monitor the costs, produce year end statements where required and ensure all income collected from you is correctly allocated and used in accordance with providing the services. Other costs covered include the provision of IT services, human resources and legal services relating to service charges.

    Where there is a managing agent who uses their own contractors, they may also charge a management fee in addition to our fee.

  • What is a scheme, estate and a block?

    A scheme is a group of properties that shares the same services. Your scheme name will be given at the top of your service charge estimate.

    An estate is the external communal areas on your scheme, this includes the grounds which we maintain including car parks, play areas and other outside spaces.

    A block is the physical building where you live, this is normally a block of flats. A block may contain any number of individual homes and there may be any number of blocks at a scheme.

  • How do I pay my service charge?

    If we charge you a service charge in addition to your rent, this will be shown on the paperwork we send through to you. You will need to pay the total amount.

    If you pay by direct debit, we’ll automatically change your direct debit to the new amount.

    If you receive benefits, it’s important that you tell your benefit provider of the new amount to be paid. We’ll often notify them on your behalf, but it’s always best for you to do so as well.

    Not all service charges are eligible for benefits. We’ll let you know the amount of any charges that are ineligible on your paperwork, these usually include water, gas and electricity supplied directly to your home.

  • Who is managing the services provided?

    We have a number of teams who work with each other in managing the service provided.

    Our Estates Team manage our contractors and internal colleagues who look after the grounds maintenance and cleaning where you live. They ensure the contractors are delivering the services they should and carry out regular inspections.

    Our Neighbourhood Coordinators are usually out and about where you live and will be able to answer questions about your service charge. They also ensure the services being provided meet your expectations and will liaise with our other internal teams if there is a problem.

    Our Service Charge Team are based in our offices and are responsible for setting the service charge estimates at the start of the year, monitoring costs and preparing the year end statement if you pay a variable charge. They are on hand to answer any technical queries relating to your charges.

  • What should I do if I feel I am being charged for a service I don’t receive or the service is not as expected?

    We know we don’t always get things right and we’re sorry if, on occasion, you feel let down by our services.

    If you have a concern about the quality of the service being provided our Estates Team and Neighbourhood Coordinators will be able to put this right.

    If you feel that you are being charged for something you shouldn’t be then your Neighbourhood Coordinator will be able to talk to you about this to check everything is as it should be. If we find there is an error in your charge our Service Charge Team will correct this as soon as possible.

  • How do I make a formal complaint about my service charges?

    We’d like to be given the opportunity to put things right but if you are still unhappy you can find details on how to make a complaint here.

    Find out more


Who do I contact at PA if I have a question on my service charge?

In the first instance, please contact us on 0300 123 2221 or send us an email. We’ll ensure your query is directed to the right team.

Contact us

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