Flat owners 'angry' at £3.4k service charge bills

Homeowners say they are "angry" and "frustrated" after receiving bills of more than £3,000 for the upkeep and management of their block of flats in Newport.

Ben Murphy, 29, said the service charge for his two-bedroom apartment, set by property management company FirstPort, had risen by 262% since 2020.

Leaseholders must pay an annual service charge to a managing agent or the freeholder for things such as building insurance and maintenance of communal areas.

FirstPort, which has come under fire from MPs in recent weeks, said it works with residents "to keep costs manageable without compromising on the quality of services".

Mr Murphy, a maths teacher, said paying the service fees - which for 2025 came to a total of £3,379 - was a "constant battle and a constant worry".

"You have discussions with your mates about saving for a holiday or saving to move out but unfortunately I'm saving to the pay the service charge," he said.

Last year, Mr Murphy said his service charge reached £4,000 after residents received an "unexpected" additional bill due to a company overspend.

When Mr Murphy contacted FirstPort about this, he claimed they offered "no clarity" on how various sums of money were being spent to benefit residents.

"There's no real detail about what we're actually paying for. We don't have any perks for the money like a night watchman or a gated community. The only communal part inside the block really is a bit of carpet by the door," he said.

Another resident in the same block, Dan Willis, said his service charges for 2025 were also £3,379.

Mr Willis, 28, said the service charges he paid in 2024 exceeded his annual mortgage payments.

He said despite working full-time and his wife working around 25 hours per week, they had to borrow money in order to pay the charge.

"When we tried to sell our flat, initially, we had 10 to 15 people interested. By the time they found out about the service charge pretty much every single one of them withdrew their interest," Mr Willis said.

FirstPort, which claims to be the UK's leading residential property manager, has faced similar claims from residents at sites it manages across the UK.

The company, which manages more than 6,000 residential developments across the UK, told BBC News there have been significant increases in both insurance and electricity costs over the past few years.

"Each year, we estimate the funding needed to cover scheduled works and maintenance and share budgets with our homeowners in advance," a spokesperson said.

"External factors meant every service industry has had to contend with price increases in some areas, however, the budget for the current year at Ymyl yr Afon [in Newport] reflects a reduction on the previous year's overall cost."

At the Victoria Wharf development in Cardiff Bay, also managed by FirstPort, homeowners are in the process of trying to remove FirstPort in order to manage the site themselves through a Residents Management Company (RMC).

Like thousands of other leaseholders, they have experienced significant increases in their service charges, particularly since 2019.

The residents say their insurance has rocketed, largely due to the impact of the Grenfell tragedy.

Collectively, the residents now pay in excess of £500,000 to FirstPort for their building insurance.

Peter Larwood, a resident of six years, said: "We don't have a say in what happens.

"We have no say in what goes on and where money is spent. It's down to the recommendations from them."

"If we look at what we're trying to do with RMC, which is to employ someone ourselves through Victoria Wharf Management Company Limited, leaseholders will have a direct line to the management company on site," said Mr Larwood.

"It'll mean much more transparency and much more visibility as to how our money is being spent and a say in something rather than no say in something."

The UK Labour government recently announced it would put an outright ban on new leaseholds.

It also said it would act to "protect leaseholders from abuse and poor service at the hands of managing agents" and make it easier for homeowners to control how their developments are managed.

But head of property litigation at Berry Smith solicitors, Simon Care, said while he felt more regulation was needed, he did not feel that leaseholds, as a concept, were a problem.

"I think there are probably three areas that would benefit from closer examination," said Mr Care.

"The first is to ensure those who are providing services, let us say, contractors, are doing so at a transparently competitive rate and not doing deals with people who are not ultimately going to have to bear their costs.

"Second, I think building insurance needs to be looked at in a competitive way.

"Third, there ought to be some regulation of what sort of percentage of service charge could be attributed to management of the building."