Homeowners have raised concerns over how Havering Council landed its latest buildings insurance contract as some residents face hikes of more than 200 per cent.
The Recorder previously reported how leaseholders living in council freehold properties recently received a letter from the council informing them their buildings insurance is due to increase.
The letter, seen by this paper, outlined how just one bidder, Protector, was deemed to be suitable after the council went out to tender. The result is a contract far more expensive for leaseholders than the council’s previous arrangement, which ended because the provider dropped out of the market.
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Due to the council being the freeholder, leaseholders are unable to determine their own buildings insurance provider, meaning they are tied to whatever contract the council agrees.
One resident, Karen Randall, said under the new contract to come into effect on March 31, her annual buildings insurance cost will increase from £185.53 to £573.05, a rise of nearly 208pc.
Other leaseholders have since come forward telling the Recorder of their concerns upon learning of the forthcoming hike.
Stephanie Broderick-Fox, 38, who lives with her wife and daughter in a maisonette near Karen, said the increase in buildings insurance will have a notable impact on her family’s life.
Bracing themselves for the same price hike as Karen, she said the biggest hit would be on the activities they can do with their young daughter.
“It means we are having to cut down. We like to give our daughter experiences and holidays, and we can’t give that to her,” she said.
“I can’t afford to take my daughter out again this month because of the costs being thrown on us constantly.”
Stephanie added the family are also having to watch their spend on food, saying: “I have never had to walk around a supermarket with a calculator before, but that’s what I’m having to do now.”
Cllr Paul McGeary, cabinet member for housing, said the rise is “beyond the council’s control”, and that costs have been affected by factors including inflation, supply chain pressures and increased severe weather.
However, concerns have been raised about the way the council's tender process operates, and how it allocated its costs.
Karen said she was told by the council that it ran an open tender procedure, enabling providers to proactively bid for the contract.
She has queried why it did not also approach individual providers, especially when only two ended up applying. Havering Council did not answer this question when put to it by the Recorder.
Stephanie and Karen also said they had asked their contents insurance providers for an indicative figure as to how much buildings insurance would cost.
Both of them claimed they were given a number more like what they were paying previously, making them question the diligence done around the contract the council agreed with Protector.
On the question of how the final fees were decided upon, the letter sent out to leaseholders clearly outlines the pricing structure as based on the number of beds and people living in a household.
These range from £467.68 a year for one-bed and studio leaseholders to £777.39 for three-bed, six-person shared ownership properties.
However, this appears not to account for properties which are likely to attract greater insurance costs, such as those with flammable cladding, meaning residents like Karen and Stephanie may be paying a premium for other homes for which the buildings insurance costs would be higher.
While making clear she is in no way pointing any blame at anyone living in properties that may have incurred higher fees, Karen said “the whole thing stinks”.
She added: “At least the council know that we are not all sitting back going, ‘that’s fine’,” and that she hopes others take heart from the fact they are not the only ones going through the stress.
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When asked about both its tendering process and the equitability of the way it allocates costs, Havering Council did not answer the questions posed and instead directed the Recorder to its previous comment from Cllr McGeary.
For those concerned about the cost of living, find help and advice on the council’s webpage here: https://www.havering.gov.uk/costofliving.
Protector was approached for comment.
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