Shocking 50% increase in leasehold service charges since 2018

The average annual service charge has risen 8% over the last year to £1,431 meaning leaseholders will hand over a total of £7.6 billion in 2023.

London executive apartments

Service charges for flats in England and Wales have jumped a whopping 51.7% since 2018 due to the cost of implementing fires safety measures since the tragic events of Grenfell Tower and the increased cost of building materials and insurance, research from Hamptons reveals.

The average annual service charge for a flat similar to those pictured in England and Wales is £1,431 or £119 per month but five years ago they averaged £943.

INFLATION

Annual service charge graphOver the last 12 months the average service charge has risen broadly in line with inflation at 8% – meaning leaseholders will hand over a total of around £7.6 billion in service charges this year alone.

The average one-bed service charge stands at £1,287 per year, the same charge as a three-bed in 2018 while the average two-bed pays £1,426 and the average three-bed £1,876.

In London, 20% pay more than £4,000 annually, compared to 11% across England & Wales.

RELIEF FOR LEASEHOLDERS

David Fell, Lead Analyst at Hamptons, says: “The last few years have brought some degree of relief for leaseholders with increases in service charges tracking inflation.

David Fell, Hamptons
David Fell, Hamptons

Annual Service Charge chart“The big hike in service charges came nearly five years ago and was wholly a product of historic fire safety failures in larger blocks.

“More recently, leaseholder premiums have been bumped up by the increased cost of building materials and insurance. Energy-intensive construction products and anything containing a microchip are however still recording double-digit value increases.

 “While recent falls in the cost of some building materials and energy costs should start feeding through into lower charges for residents, it won’t happen overnight.”


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