My service charge has gone up this year, why?

There are a lot of different things that make up the service charge budget that could result in a change to your charges.  These include:

  • Last year's charges were more than we budgeted for
  • We expect the costs of providing services to increase
  • Changes to how we calculate our management fees
Last year’s charges were more than we budgeted for

If the costs of delivering your services last year was more than we had budgeted for,  the shortfall (known as a deficit) will show in your Service Charge Statement which most of our customers should have received earlier in February.

If you are a rented customer this shortfall is carried over and included in your next set of charges to be repaid over that year. The accounts for homeownership customers follow a different process.

Please check your Service Charge Statement to see if this applies to you.

We expect the costs of providing services to increase

When your service charge budget is set, we check to see if the costs for next year are expected to increase.  This is done by looking at:

Known Increases

These include cost changes which we know are due to happen such as a price increase in a service provider contract.  An example is where a cleaning contract says it goes up by a set percentage each year so we use the current costs plus the percentage increase to estimate the costs for next year.

Unknown Increases

There are a number of unknown costs, for example, what will be the rate of inflation over the next year.  Inflation is a rise in the price of goods and services we buy.

This year, we expect charges in general to increase more than the current rate of inflation. This is because financial experts, such as the Bank of England, expect inflation to increase during 2017. So, where the amount of the increase is unknown, we have had to increase estimated costs by more than the current rate of inflation. The amount of the increase varies on the type of service.

For more information about how we calculate your budget please click here.

Changes to how we calculate our management fees

We have reviewed how we calculate our management fee. This is the amount we are allowed to charge, on top of the costs of the services you receive, for Orbit to manage that service and account for the costs.

As Orbit has been made up of a number of different organisations, we had a mixed approach to calculating these charges. We have decided that it is fairer to all our customers if we calculate these fees in the same way across the organisation and have looked at what is the current best practice.

We then looked at what it costs us to manage the services for different customer groups.  We identified a number of fees based on the type of services a customer received. The amounts were then compared to other Registered Providers (housing associations) to check they are in line with what others housing associations charge their customers.

The changes to our fees are based on what the Association of Residential Management Agents and the Royal Institution of Chartered Surveyors say are the best way to calculate fees (this is known as ‘best practice’). 

If you need any more information about your service charges and what services are included please contact the Service Charge team. You will need to let them know who you are, where you live and what extra information you require.

What is my service charge made up of?

We provide a range of different services to customers. The types of services may depend on what type of property you live in and if you rent or own your own home and what is in your agreement. Customers who live in a flat are likely to receive more services (such communal cleaning and a door entry service). Customers who live in a house may just pay towards to costs of gardening for a communal area. 

Sometimes there is a mixture of different types of properties in the same area, so all the customers will pay towards charges that everyone receives. Customers who live in a block of flats will pay for the services that relate to their home.  A picture illustrating of what makes up your service charges can be found here

For more information about what type of costs are included in your services charges please click here.  

We have also put together some frequently asked questions based on what our customers have asked when they have received their budget statement.

How do I pay my service charges?

For information about the payment options please click here. You can also log onto the My Account area of the website to check how you currently pay or to set up a direct debit.

For other information about your service charges  go to the customer areas for rented customers, shared ownership customers or leasehold or freehold customers.

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