‘So what’s the problem? The issue starts to get really juicy when conflicts of interest arise’.

The service charge seems fair at first sight. After all, you, as a resident or business, are benefitting from the services until you start to see the cost of this charge and then question why it’s so high, followed by asking for a justification for such high charges, only then do you realise the nature of the service charge as a model to exploit the often financially trapped resident. The unregulated and non-transparent, and finally, the undemocratic nature of this setup, becomes all too clear to the everyday citizen who examines their purchases daily to determine whether they have found value or are being exploited due to their ignorance; this service becomes easy for the landlord to exploit the resident, as the option to leave becomes a sum game of how much loss of time, finances and mental strain to move, versus to just accept their fate and pay up. (in economic theory, this is known as stickiness; the more effort required, the more sticky the product is. This can work both ways).

‘This is why so many hedge funds and ‘investors’ are keen on these projects, due to the lack of regulated transparency for the leaseholder to hold the freeholder to account’.

The first of many excuses why there can’t be any transparency is the age-old ‘commercially sensitive information’ argument; ‘we can’t divulge how our operation works as our competitors may take advantage (oh, the irony of that argument)’!

Then we have the gatekeepers, often third-party agencies operating the collection of rents/service charges and vested in just serving their masters, the freeholders. And finally, we have a long-term government policy of the neoliberal trope that we can’t afford to run these projects. ‘We need private investment’! they hail when, in reality, this private investment will demand an above-inflation return. Part of that return is the service charge with minimal amounts actually going on ‘services’ and major going back to the allegedly risk-taking investors that, as Milton Friedman (one of the creators of the Neoliberal ‘free market’ model) determined, should always be paid first, after the actual maintenance, security etc. as this was in his view ‘only fair’, spoiler it’s not, the investors are in fact just rentiers taking money from the renters whilst doing absolutely nothing!

This is not new money. It’s just transferred money from the productive class to the non-productive class, as stated by Adam Smith, John Stuart Mill, Ricardo, Karl Marx, Winston Churchill, and John Maynard Keynes. They all understood the nature of the rentier, which we had forgotten until Thomas Piketty’s recent expose of this fact in his international bestseller Capital of the 21st Century (2014).