The Guardian has reported on a surge in leasehold charges, stating that the sharp 11% rise in average annual service charges for leasehold flats—now at £2,300—marks the biggest increase in at least eight years. This escalation, significantly outpacing inflation, adds to financial pressures on leaseholders, for whom service charges are often the second-largest household expense after mortgage payments.
The surge in costs is likely to intensify demands for government action on leasehold reform, a sector long criticised for lack of transparency, excessive charges, and poor regulation. The rise may also exacerbate affordability concerns, particularly in a high-interest-rate environment.
Average annual service charge and five-year change in England & Wales
| Average annual service charge | 5-year increase | |
| North East | £2,048 | 60.9% |
| North West | £2,136 | 57.6% |
| Yorkshire & Humber | £2,053 | 40.2% |
| London | £2,633 | 39.0% |
| East Midlands | £2,078 | 28.5% |
| South East | £2,102 | 26.3% |
| Eastern | £2,070 | 23.9% |
| South West | £2,028 | 21.5% |
| Wales | £1,767 | 20.8% |
| West Midlands | £2,114 | 18.6% |
| England & Wales | £2,300 | 33.9% |
Source: Hamptons
David Fell, lead analyst at Hamptons, says: “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.
“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.
“Both buyers and mortgage lenders have become increasingly cautious about committing to high service charge costs, particularly where they perceive charges to be disproportionate to the amenities they get in return. Consequently, there is mounting pressure for leaseholders to have a greater say in how their money is spent.
“Would-be sellers paying high charges have often seen the value of their homes rise more slowly or even fall. In some cases, sellers are offering potential buyers a cash contribution towards future service charge payments.”
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