South London Woman Faces £2,900 Heating Charge, Losing £1,500 on Property Sale
A South London woman, Lucy Gould, recently experienced a setback in the sale of her two-bedroom flat on the Brandon estate in Walworth, Southwark. The issue arose when the local council imposed a hefty £2,900 charge for heating and hot water on her property, ultimately leading to a loss of £1,500 for the homeowner. This unexpected expense caused her potential buyer to withdraw from the sale, citing concerns about being able to afford the additional costs on top of mortgage payments. The incident has sparked a deeper investigation into the challenges posed by district heat networks, particularly in Southwark, by the Local Democracy Reporting Service (LDRS).
Lucy shared her frustration, stating, “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.”
District Heat Networks and Rising Costs
Lucy is just one of many leaseholders in Southwark connected to a council-managed district heat network, where a communal boiler supplies heating and hot water to properties through a network of pipes. Unlike those with individual boilers, residents on heat networks are not currently protected by regulator Ofgem’s price cap, leading to significantly higher heating costs. The lack of regulation has resulted in residents facing bills that can be thousands of pounds more than those with individual heating systems.
Residents like Max Templer, a leaseholder on the North Peckham estate, have raised concerns about the inefficiencies of district heat networks. Templer discovered that the network his property is connected to was using three times more energy than average to heat his flat. Additionally, data obtained through a Freedom of Information request revealed a significant increase in energy usage on the Brandon estate’s district heat network between 2022/23 and 2023/24.
Southwark Council has attributed these rising costs to the increased price of gas due to geopolitical factors such as the Russia-Ukraine war. However, residents have expressed frustration over the lack of transparency regarding these cost hikes and the impact on their finances. An anonymous leaseholder on the Brandon estate shared, “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.”
Council Response and Future Plans
Councillor Sarah King, Southwark’s cabinet member for council homes and responsible for district heating, acknowledged the challenges faced by residents connected to district heat networks. She emphasized the long-term benefits of district heating in achieving carbon reduction targets and economies of scale on repairs. Cllr. King also highlighted the council’s efforts to support residents struggling to pay their heating bills and address concerns about inefficiencies within the heat networks.
The council is implementing metered systems across the borough and prioritizing investments in heat networks to improve efficiency. Cllr. King explained, “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.”
Moving Forward
The challenges faced by Lucy Gould and other residents in Southwark highlight the complexities of district heat networks and the impact of rising energy costs on homeowners. As discussions continue about the future of these systems and how to address inefficiencies, it is essential for stakeholders to work together to find sustainable solutions that benefit residents and the environment. By keeping the dialogue open and actively seeking input from residents, local councils can better address the concerns and challenges associated with district heating systems.
