Service charge

Insurance surge sends siding victim’s service costs skyrocketing

My service charge has almost tripled to £719 per quarter: owner of apartment affected by coating sees annual building insurance premium rise from £34,000 to £500,000

  • Flat owner sees building insurance in the block rise from £34,000 to over £500,000 a year
  • The increase in insurance costs is a development impacted by cladding issues
  • Increases in insurance costs are despite the installation of new fire alarms

A landlord faces financial ruin as he has to pay his share of building insurance costs which have risen from £34,000 to over £500,000 a year amid the siding scandal.

Grandmother Julie Fraser, 59, bought the investment property – a two-bedroom flat in Cheshire – in 2016 with her savings of £76,000 from her pension plans.

Five years later, she faces a refinishing repair bill that almost matches the price of the flat at £73,000.

But it’s not the staggering repair bill that causes Ms. Fraser the most immediate financial worry.

Instead, it’s the skyrocketing quarterly service charges on the property – which include the cost of insuring its site building – that have become unaffordable and the most pressing financial problem.

Julie Fraser saw the building insurance for her apartment building drop from £33,892 in 2019 to £514,000 in 2022

Soaring quarterly service charges on the property – which includes the cost of insuring the building of its site – have become unaffordable.

Buildings insurance soared due to property coating issues, from £33,892 in 2019 to £514,000 in 2022.

This despite the installation of new fire alarms on the site.

This has increased the service fee she pays from £254 per term in 2019 to £719 per term in 2022.

Ms Fraser lives five minutes from her investment apartment, which is part of a development that has 288 homes.

Ms Fraser bought her two-bed flat in 2016

Ms Fraser bought her two-bed flat in 2016

Even if she rents the property, she is responsible for paying the service charge. But she can no longer afford to pay.

She said: ‘I can’t afford to pay the £719 and face a breach of the lease if I’m not able to pay it.

“I thought I was doing the right thing investing in the apartment. I am now unable to work due to health issues and have been living for two years on my savings. These have now dried up.

“The flat has no mortgage as I bought it with my savings to help provide my pension. There are so many people in the same situation who are worried about these costs.


Tenants aren’t treated the same when it comes to siding costs, the National Residential Landlords Association (NRLA) has warned.

When Housing Secretary Michael Gove announced plans to make developers pay for remedial action to tackle unsafe cladding in buildings between 11 and 18 meters high, he also argued that tenants should not be expected to foot the bill.

However, ministers have now admitted they have not yet decided whether buy-to-let landlords will be included in the scheme.

In a parliamentary response, Housing Minister Chris Pincher confirmed that those who sublet properties because they cannot sell them due to unsafe coatings will be included in the government scheme. But he also said a decision on whether to extend it to rental landlords has yet to be made.

The NRLA warns that the Government’s plans do not treat all tenants equally – and also risk delaying repair work on unsafe surfacing as the Government seeks to understand who may be an accidental landlord or to rent.

Ben Beadle, from the National Residential Landlords Association, said: ‘It makes no sense to treat renters who are landlords so differently from owner occupiers. Both groups faced the same problems and should be treated the same way. We call on the government to urgently rectify this injustice.

His comments come after Michael Gove, the Secretary of State for Levels, Housing and Communities, wrote to the Financial Conduct Authority asking it to review the building insurance market for multi-occupancy residential buildings .

In the letter, Mr Gove wrote that ‘building insurance premiums have increased significantly for almost all building tenants’.

He responded by saying: ‘While insurance premiums are just one aspect of the rising costs faced by residential leaseholders following the Grenfell tragedy, we want to make sure the products offer fair value and that premiums fairly and accurately reflect risk.

“We’re asking businesses to consider what actions they can take to help tenants, either individually or by identifying collective solutions as an industry.”

Since the Grenfell Tower fire in 2017, concerns over cladding have become a national issue

Since the Grenfell Tower fire in 2017, concerns over cladding have become a national issue

Ms Fraser welcomed Gove’s recent intervention on cladding repair bills, in which it announced that tenants living in blocks less than 18m would not have to pay their cladding repair bills.

She said: “I believe Michael Gove wants to make a difference. He listens and so far he does what he said he would do.

“I’d like to think next year will be more positive and our insurance premiums will drop closer to where they were. Realistically it would be nice to get them down to £50,000.

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