Proposed changes to rules on service charges are a threat to housing association finances
News that the Department for Work and Pensions is considering changes to regulations concerning what aspects of service charges are and are not covered by housing benefit will send shivers up the spines of most housing association finance directors.
Service charges, on average, make up about a tenth of the annual rental income of social landlords. At a time when rents are under increasing pressure, changes to service charge revenue is the last thing social landlords need - particularly when they only collect 77 per cent of their service costs at present. Finance directors will take some comfort from the fact that the DWP has promised it has no intention of altering what currently qualifies for housing benefit support. As the draft regulations stand however, this would be far from the case, with some landlords fearing that fuel bills, children’s play areas and lifts will be among the areas excluded. It has to be hoped that the DWP is as good as its word.