Residents overcharged and threatened by one of the UK's largest housing associations - as government accused of 'turning blind eye'
An LBC investigation has uncovered a litany of mismanagement and accounting failures by Peabody Trust.
One of the country’s largest housing associations has repeatedly threatened residents with legal action despite charging them “hundreds, possibly thousands of pounds” for services that were never carried out, LBC can reveal.
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An LBC investigation has uncovered a litany of mismanagement and accounting failures by Peabody Trust, a non-profit housing association with a so-called mission to create affordable homes, at an east London block.
As the organisation saw its surplus profits double to £107 million the last financial year, it was also sending leaseholders threatening letters and court orders over unpaid service charges as it slapped them with “astronomical” bills.
But documents seen by LBC show these residents did not rightfully owe the amount of money Peabody had requested - with one being told they are more than £9,000 in arrears - and some are still waiting to be fully reimbursed.
Residents told LBC the whole ordeal has left them 'stressed, depressed and anxious'. Campaigners say this pattern of overcharging is seen all too often in the private housing sector and accused the government of “turning a blind eye”.
Lekan, 51, got the keys to his east London flat on 9/11. He began as a renter but several years later in his late 20s he managed to buy his property through the affordable housing scheme.
Read more: Poor social housing causing simmering anger says ombudsman as complaints soar
The pensions worker, who suffers from Sickle Cell Disease and lives in a basement flat, said things went relatively smoothly until Peabody began managing the building in 2017.
For years, he had been asking for a new gate to be installed to stop people from entering the building’s car park, after walking outside to see people “shooting up, having sex, and sleeping rough.”
When one was finally built, builders failed to install an intercom system or a postbox, leaving him “essentially cut off from the world” just as the Covid pandemic broke out.
Lekan told LBC: “After four years of fighting for it, I just accepted. The postbox they promised me was never put in. My post is going missing. I'm vulnerable and they know I'm vulnerable. I suffer from sickle cell. If I have a crisis, how's anyone going to get me if I can't get up the stairs?”
But this had ramifications for the entire building.
Peabody has admitted contractors were unable to carry out grounds maintenance between 7 February 2023 and 18 July 2024 - the period when there was no intercom installed and contractors couldn’t get in.
Documents seen by LBC also show multiple pre-arranged cleanings of communal areas were missed, yet Peabody still billed residents at least £1,000 over the period these services.
Lekan said he’s been asking for years to sort out the service charge issues and requests a reduction to reflect the time when their contractors were unable to properly fulfil their duties.
“It got to the point where I said, you know what, I'm not paying the service charge, I want a discount… I mean, I’m £9,000 in arrears.”
“One minute they're taking me to court, one minute they'll just call me out of the blue, say ‘what's going on’, then I won't hear from them for six or seven months. It's like they just wake up now and then, start chasing, then they go to sleep.
“it's got to the point where it's just causing me so much anxiety and stress. I'm writing letters back and forth, going around in circles. It’s been really stressful for me.”
He blamed the issues on a high turnover of staff, and a service charge team that can be quite “insensitive” and who at times “act more like bailiffs than a team trying to resolve residents’ concerns”.
Lekan said the whole ordeal has left him with PTSD and worsened his depression and anxiety.
While he has been dealing with these issues for years, newer residents are encountering them for the first time.
One of those residents, who wished to remain anonymous, told LBC they first learned of the problem when they “got this really threatening letter in the post”.
They said the letter said requested an “astronomical” amount in overdue service charges and threatened legal enforcement.
“Mind you, this is like the first letter I've gotten from Peabody, even though I'd been trying to reach them,” they said.
They added: “In the letter they didn't actually give me the breakdown of the service charge. That's why I was forced to compare what they were saying with the historic records and started to realise there are all these discrepancies.
“The more I thought about it, the less it made sense. And the more errors that I was finding just didn't give me confidence that anything was being handled properly. So that's when I just started digging more and more and more, and each time I just dig a little bit deeper, there is a whole other can of worms.”
They estimate that they were ultimately overcharged "hundreds, possibly thousands" of pounds.
Peabody has since credited the resident with separate payments of £261.55 and £695.80 after admitting to the accounting errors, and has acknowledged that it owes further funds that are yet to be reimbursed.
However, documents obtained by LBC show residents were also hit with duplicate costs - an estimated £4,090 - after being billed twice for fire safety work on the building.
They made further complaints over a lack of transparency about the building’s reserve fund - money held by a freeholder typically used for building repairs and maintenance.
The resident alleged: “Peabody just doesn't do any of the repairs. They're basically hoarding our reserve fund. We don't know where it is. And they're not using it for the maintenance of the building.”
This is not the first time Peabody has been accused of overcharging residents.
Data obtained by LBC shows the Housing Ombudsman has investigated at least 23 complaints into alleged service charge errors at the hands of the housing association since 2023.
Peabody is also not the only major social landlord accused of overcharging residents for services.
The Housing Ombudsman’s data shows it has investigated 1,138 total service charge cases involving housing associations since 2023 - and cases appear to be increasing year on year.
In 2024/205, 352 cases were recorded, while 487 were investigated in 2025/2026.
So far in this year, 299 service charge complaints involving housing associations have been reported.
A report by Social Housing Action Campaign (SHAC) published in March identified systematic fraud around service charges, where landlords overcharge for "ghost" services that are never delivered, and a growing list of mysterious annual fees.
A review of 238 court hearings about claims relating to service charge misuse found that housing associations were the worst offenders.
Suzanne Muna , secretary and co-founder of SHAC, told LBC that Peabody is not the only “rotten apple”, insisting that the “barrel is rotten” among housing associations.
She told LBC: “This kind of overcharging and mismanagement of service charge accounts is very common. There is nobody who actually regulates service charge accounts and what they charge tenants. They don't submit any information about that apart from how much they collect in total.
“There's very little redress. You're really relying on your own ability to persuade the landlord to address the problems themselves, and they hold the bulk of the information. So it really is a national industrial-scale scandal as far as we're concerned.”
'They're deliberately turning a blind eye'
Ms Muna claimed housing associations have learned that they can “charge whatever they want” and can “be as sloppy as they like with the accounts”
“Errors only ever end up with taking more money from tenants and residents somehow, you know. But it's all overcharging. It's just disgusting,” Ms Muna added.
She accused the Government of “ very deliberately turning a blind eye” despite repeatedly being warned about the issue.
“We've sent them a load of evidence about, about the scale and the scope and the depth of service charge abuse and the repetition of it… they are just refusing to acknowledge it.”
Ms Muna claimed the reason successive governments have been reluctant to “hold housing associations to account” is because they are “relying so heavily on the private sector to deliver on the housing promises they make because they are ideologically opposed to building through councils.”
'They've got the government over a barrel'
She added: “Therefore they've ended up in this very unholy alliance with the private sector that in turn has got government over a barrel. They've got a huge leverage with government, and whenever government does anything to hold them to account, they just threaten to stop building.”
A Peabody spokesperson said: “We’re sorry there have been errors with some of the service charges at this building. We know residents need to have confidence that charges are fair, accurate and reflect the services provided.
“We’ve corrected previous years’ accounts and the latest accounts are currently being finalised, with any further adjustments to be reflected in the final charges.
“We know we need to keep improving how we manage service charges and are working hard to make sure they are accurate and reasonable, and to put things right when mistakes are made.”
A spokesperson for the Ministry of Housing, Communities and Local Government said: “It is unacceptable for housing associations to charge residents for services that were not provided. We welcome Peabody accepting its mistakes, and it must now ensure residents are charged correctly in future.
“We are committed to making service charges more transparent and easier to challenge, and through a new Competence and Conduct Standard we are ensuring that tenants will be treated fairly and with respect.
“It is wrong to suggest the government is not supporting council housebuilding. Last week, we announced the first wave of funding from our £39 billion Social and Affordable Homes Programme, which will help deliver the council, social and affordable homes this country needs.”