NESTLED in the quiet and leafy suburbs of Surrey, the Park 25 housing estate looks like an ideal place to raise a family.
But just 30 minutes away from central London, in the desirable commuter town of Redhill, a financial nightmare has unfolded for hundreds of families that live there, including dad-of-two Nicholas Edwards who claims his service charge has more than doubled.
When 36-year-old primary school teacher Nicholas and his wife Sally, 36, bought their two-bed leasehold flat seven years ago they say they were paying a £200 a month service charge.
But the couple allege this has now jumped to a whopping £700 a month, almost the same as their £800 a month mortgage payment – and the hard-working dad has had to take on extra work as a tutor at weekends to keep up with rising costs.
“We feel completely stuck. It’s like having a noose around your neck that’s just getting tighter and tighter,” primary school teacher Nicholas, 35, tells me as I sit down in a local pub nearby with him and a group of residents.
“If I hadn’t taken on a second job, our savings would have evaporated and we couldn’t have paid the service charge. We would probably have had to forfeit the property,” he added.
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The couple have two young children aged six and 11 months old.
But Nicholas and his wife delayed having their second child for five years due to the financial pressure.
They are just two of the Park 25 residents who say their service charges have doubled or even tripled, leaving homes “unsellable” as buyers are so turned off by fees it has forced house prices down in the area.
FirstPort is the UK’s biggest leasehold management company, and in recent years it’s come under fire as scores of its residents have raised serious concerns about rising service fees and poor practices.
Recent stories include a man billed £12,000 to fix a leak in his roof which returned shortly afterwards, and another block of flats who suffered from regular flooding, damp and mould.
Nicholas and Sally, who is a speech and language therapy assistant, want to move into a house to bring up their children but they say they’re struggling to sell the flat.
They bought the property for £270,000 in 2019 but say they can’t even sell it for the same price now, even as house prices elsewhere have soared.
Similar flats in Redhill are selling for upwards of £350,000.
“We earn more now than we ever have as a couple but we still can’t make that next step,” he said.
“We’ve lost buyers because they’ve Googled our estate and seen the problems with the service charges and with FirstPort.”
‘One of the worst leasehold nightmares in the country’
Just under 450 homes are on the estate, a mixture of flats and houses which are mostly leasehold.
The small group of five residents I meet have banded together to raise awareness of what’s happening.
But Nicholas tells me there are many more at Park 25 who are struggling and angry at the way they’ve been treated.
He says some are falling behind on their service charge payments because they simply can’t afford it and are then being hammered with late payment fees.
Others have allegedly seen the value of their homes drop by tens of thousands of pounds and have tried to sell multiple times unsuccessfully over the years.
What is leasehold?
IF you’re in a leasehold home, it means you own the property but the land it stands on is owned by the freeholder (often a housing association).
You’ll often have to pay service charges to the freeholder for the upkeep of the communal areas, and you may have to pay ground rent too.
An estimated 4.8million homes in England are leasehold.
Homeowners across the country have raised issues like expensive and unclear service charges, escalating ground rents, and mismanagement by freeholders.
A recent survey by Barclays found only a quarter of leaseholders realised the charge could be increased over time.
No cap is set on how much freeholders can raise service charges by each year.
That means that for leaseholders, it can feel like a bit of a Wild West situation – and there is no one to turn to when their fees increase.
Many are also forced to pay ground rents to freeholders of up to thousands of pounds a year for simply owning the land their home sits on.
Some are trapped in contracts where ground rents double every 10 years.
These “doubling clauses” are a red flag to banks, meaning many families effectively own homes worth £0 because nobody can get a mortgage to buy them.
FirstPort has claimed it doesn’t make a profit from the service charges and blamed the housing development’s “increasingly inefficient” biomass heating system for the raised charges.
It said these cost pressures are outside of its control and it’s been exploring options to improve the heating system, which was installed by the housing developer, since early 2024.
Local MP Rebecca Paul believes the situation at Park 25 is “one of the worst in the country”.
“People can’t sell their homes due to the excessive service charges going up – it’s literally ruining lives,” she said.
Among them is retiree David Edge, 69, who says he’s finding it impossible to sell his parents’ two-bedroom flat on the estate.
The flat is now empty as David’s father, Eric, passed away last year at the age of 96 and his mother, Lorna, is in a care home.
They had bought the property for £215,000 in 2014, but now David is struggling to sell it for the same price.
Similar two-bedroom properties in the area are selling for £270,000 on average.
“We just can’t get anybody to look at the flat at all. We’ve had three viewings since February,” David said.
A letter from his estate agent confirmed the “main issue” with selling the property is the “significant increase” in the service charge, which is now at around £6,000 per year.
David claims his parents weren’t properly informed about the service charge as it wasn’t mentioned in the paperwork when they bought the property.
Now he’s unable to proceed with his dad’s will while the flat remains unsold – which also means he is unable to pay the £56,000 he owes the care home his dad was in before his death.
On top of this, he’s expecting to be hit with late payment fees from FirstPort as the service charges aren’t being paid while his dad’s estate is in probate.
“Dad thought he’d set everything up to make things nice and easy for me to deal with, but it’s impossible without being able to sell the house. I’m stuck between a rock and a hard place,” he said.
Train driver Andrew Barker, 52, is having similar problems – he claims he’s tried and failed three times over the years to sell his home.
He bought the two bedroom flat for £210,000 in 2014 and says he now can’t sell it for the same price.
When he first moved in, he says he was paying a £200 service charge per month.
Now it’s allegedly rocketed up to almost £700.
Andrew said the increases have hit his pocket hard and he’s not the only one.
“There are people here really, really struggling to pay their bills and service charges,” he said.
The battle against FirstPort
ONE million people across the country are living in homes managed by FirstPort.
It’s the UK’s biggest leasehold management company and is owned by private equity firm Emeria.
The housing association has come under fire and even attracted the attention of the Government as residents have raised serious concerns about its practices.
They say they’ve been dealing with high service charges, slow repairs and aggressive debt collection techniques.
Martin King, the managing director of FirstPort, was recently hauled in front of senior government minister Matthew Pennycook to discuss the issues.
Following that meeting, Mr Pennycook wrote a letter to the company raising “significant concerns” about the service it provides to residents.
MPs also recently held a hearing in parliament for FirstPort residents to share their stories.
Some complained of unresolved problems like flooding and serious mould, while others accused the company’s solicitors of behaving like “bullying, abusive debt collectors”.
Now, a cross-party group of around 100 MPs is pushing the Government to intervene and create more regulation around leasehold and service charges.
A spokesperson for the Ministry of Housing, Communities & Local Government told The Sun: “We’ve raised serious concerns with FirstPort about the service it provides to leaseholders – we have set out areas where we would like to see improvement and we will monitor their performance closely.
“Too many people are facing these issues, which is why we’re making costs easier for leaseholders to challenge. Unreasonable charges are totally unacceptable and we’re clear that any company acting in this way should fix it quickly.
“We’re also banning leaseholds for new flats to give homeowners control over bills.”
‘We have no idea what we’re paying for’
While the service charges increase into the thousands each year, the residents of Park 25 question where the extra cash is going.
As we leave the shelter of the pub and head to the estate, the group points out signs of disrepair.
Although the estate looks mostly pleasant, one flat is covered in what appears to be black mould that’s obvious from the outside.
The bike shed looks poorly maintained and at one point there’s a strong waft of weed coming from a couple of teenagers hanging around.
Some residents worry about their kids’ safety at night as they say the street lights frequently break and take too long to get repaired.
They question whether they are getting value for money – and what their service charges are actually paying for.
There is a FirstPort office on the estate, but the residents claim the management team is unhelpful when they raise issues.
And when they’ve been asked for a breakdown of where their service charges are going, they say they’ve been handed a lengthy and confusing document that is difficult to make sense of.
A spokesperson for FirstPort said the service charges “reflect the actual costs of managing and maintaining the development” and it does not receive commission or referral fees from contractors.
“We continue to work closely and constructively with residents and the local MP to ensure charges are clearly explained and understood,” they said.
The residents worry about the negative reputation that Park 25 has gained thanks to the issues with FirstPort.
But they say that despite this, there’s a lot they like about living there.
Cerise Sauer, 38, who is on maternity leave, says her young family has been “very happy living here” and it’s a “friendly neighbourhood”.
“It’s such a nice place to live so I really want to get things sorted with FirstPort,” she said.
“We just want to be able to change people’s perspectives on the area so we don’t struggle with selling in the future.”
What’s happening with leasehold reforms
The Government is expected to reveal new laws to overhaul the leasehold system this year.
It was originally going to unveil the long-awaited Leasehold and Commonhold Reform Bill before Christmas, but leaseholders have been left frustrated by a delay.
It’s not clear now when the measures will be announced.
Conservative MP Lewis Cocking, who is a member of the Housing Select Committee, said there are “millions of people up and down the country who are waiting for action on leasehold reform”.
“The Government promised this in their manifesto but have just proceeded to just kick the can down the road,” he said.
The Bill promises to grant new powers for neighbours to join forces and buy the freehold of their building, effectively allowing them to fire their management companies and take control of their own homes.
It also intends to ban the leasehold system entirely for most new flats, affecting the next generation of buyers.
Another measure could include making it far cheaper and easier for homeowners to extend their lease, ending the complex and expensive legal battles they currently face.
The Government is also planning to abolish a draconian rule known as “forfeiture”.
Currently, the rule allows a freeholder to seize possession of your entire home – and keep all the equity – if you missed a payment or have a minor debt.
The new Bill will scrap this power, ensuring you cannot lose a £300,000 home over a £300 dispute.
However, campaigners are concerned Labour could ditch its promise to cap ground rents.
The Government had previously promised to cap the rate at either a nominal value or £250 a year.