Service charges soar to hit record high

Flat owners in England and Wales face escalating costs as annual service charges surge to £2,300 – leaping by 11% last year, Hamptons reveals.

This increase dwarfs the 2.5% rise in the Consumer Price Index (CPI), placing financial strain on leaseholders, the agency says.

For the first time, average charges exceed £2,000 in every English region, with one-bedroom flats now costing £2,000 annually.

Only in Wales do average service charges stand below £2,000.

There’s also a widening North-South divide with the North East experiencing a dramatic 60.9% rise in the past five years, compared to 27.7% in the South.

Service charges push up costs

The firm’s lead analyst, David Fell, said: “Service charges continue to be pushed up by climbing costs.

“While rising utility bills initially drove inflation, higher wage and insurance costs followed, resulting in the biggest increase in service charges since our records began.

“With a high proportion of service charges taken up by labour and buildings insurance, most leaseholders will have seen their bills continue to rise in recent years.”

He added: “While the cost of running a home has risen for pretty much every household over the last five years, some leaseholders have seen costs rise much more quickly.

“And with limited ways to find savings, the cost of running some facilities, which were affordable five or 10 years ago, could now be breaking the bank.”

Pay more in service charges than council tax

The study from Hamptons also reveals that 51% of leaseholders now pay more in service charges than council tax, highlighting the substantial financial burden.

In 2024, the average annual service charge for a one-bedroom flat in England and Wales surpassed £2,000 for the first time, reaching £2,007, an 11.5% increase from the previous year.

Service charges for two-bedroom flats averaged £2,351 (a 10.9% rise), while three-bedroom flats cost £2,977 per year on average (a 7.7% increase).

Buildings with more amenities

Hamptons says that service charges are typically higher for larger flats and in buildings with more amenities.

Developments with lifts, for example, have average service charges that are 16% (£364 per year) higher than those without.

Flats in buildings with gyms carry a 24% (£561) premium, and those with a concierge service have charges that are 39% (£892) higher than those without.

Overall, larger developments with a wider range of amenities have experienced faster growth in service charges compared to smaller developments with fewer facilities.

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