'My house buyer pulled out after council put my energy bill up £1,500 before they signed contract'
A South London woman's property sale fell through after her flat was slapped with a £2,900 charge for heating and hot water by the local council. Lucy Gould, 32, had found a buyer for her two-bed flat on the Brandon estate in Walworth, Southwark in early 2023 when she found out Southwark Council was putting up the price of her heating and hot water by £1,500.
After sharing information about the additional expenses with the purchaser, they pulled out of the sale saying they feared they wouldn't be able to cover mortgage payments due to the extra costs. She is sharing her story as the Local Democracy Reporting Service (LDRS) looks into the issues caused by district heat networks, particularly in Southwark.
She said: "We were looking to sell at the start of 2023 and we got a buyer around February 2023. We hadn't seen the estimated service charge at the time and then when we received it, it had shot up.
"The buyer said the service charge is too high and they wouldn't have been able to afford the property and make the mortgage repayments. They explicitly said 'we want to buy it' but they weren't able to afford it. The charges are pretty unsustainable with the change in mortgage rates. We have cut back on the holidays and the nicer things just to afford everything. It's really difficult."
Ms Gould is one of hundreds of leaseholders across Southwark whose home is connected to a council managed district heat network, where a communal boiler supplies heating and hot water to properties via a network of pipes. Unlike most people with individual boilers in their property, residents whose homes are on district heat networks are not currently covered by regulator Ofgem's price cap. As a result, residents on heat networks can be charged thousands more for heating than those with individual boilers.
District heat network 'using three times more energy than average'
Town hall officials have previously blamed huge bill increases for residents who are connected to district heat networks on the increased cost of gas linked to the Russia Ukraine war. But Southwark leaseholders have raised concerns about inefficiencies with district heat networks, such as excess energy consumption.
Earlier this year Max Templer, a leaseholder on the North Peckham estate, revealed a district heat network his property is connected to was using three times more energy than average to heat the flat. Figures revealed by a Freedom of Information (FOI) request made by Mr Templer also show that energy usage on the Brandon estate's district heat network shot up by over 150 per cent between 2022/23 and 2023/24. Southwark Council was asked what could explain this increase in energy consumption but didn't respond directly to the question.
Another leaseholder on the Brandon estate, who asked to remain anonymous, said his service charge bill had more than doubled in three years, overwhelmingly driven by massive increases in the cost of heating and hot water. He said: "The [service charge] bills have gone up to around £5,500. That's mostly down to the increase in energy [costs]. We can't do anything about it. It's irrespective of whether we use it or not.
"I think it's going to be hard if we were going to sell the property or even find a buyer because there's the additional costs of the service charge. We would have to massively drop the price to take that into consideration."
Councillor Sarah King, Southwark's cabinet member for council homes who is responsible for district heating, said: "We know that district heating can offer value for residents long-term, offers opportunities for meeting our net zero targets for carbon reduction and makes it easier to achieve economies of scale on repairs. If anyone is struggling to pay their heating bills, please get in touch with the council so we can support you. It's important that we keep the dialogue with residents open on this issue and we will continue to hear their concerns and check individual properties if the figures do not seem right.
"The cost of fuel has risen exponentially over the past years, meaning prices are very high. As we buy in advance, the more recent reduction in price is not yet reflected in bills. There are outstanding repairs to some boilers which need to happen and our older properties are not as efficient as more modern ones. The council is implementing metered systems across the borough and prioritising our heat networks in need of investment to improve their efficiency."
Got a story? Email robert.firth@reachplc.com.
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