UK Leasehold Service Charges Surge 11% to £2,300

Leasehold Service Charges Hit Record High

The cost of maintaining a leasehold flat in England and Wales has surged by an unprecedented 11% in 2024, reaching an average of £2,300 per year. According to property experts at Hamptons, this marks the largest increase in at least eight years, raising concerns among homeowners and policymakers alike.

Key Factors Behind Rising Service Charges

Several factors contribute to the sharp rise in leasehold service charges, including:

• Increasing maintenance and repair costs
• Higher costs for building insurance and management fees
• Newly built city-center properties with expensive amenities

The north of England, especially areas like Manchester, has seen some of the largest service charge increases, largely due to new developments featuring amenities such as gyms, lifts, and concierge services.

Impact on Homeowners & Property Market

The increase in service charges is placing additional financial strain on homeowners, many of whom already face rising mortgage costs. Analysts note that more than 50% of leaseholders are now paying higher service charges than their council tax bills, which affects property values and complicates sales.

Call for Leasehold Reform Intensifies

The hike in service charges has renewed calls for urgent leasehold sector reforms. The newly passed Leasehold and Freehold Reform Act 2024 introduced some changes, but critics argue that further action is needed to protect homeowners from excessive fees and unfair leasehold terms.

Future Outlook

Experts anticipate service charges will continue rising unless systemic changes are made. With Labour pledging to overhaul the leasehold system, there is hope for fairer costs and more transparency in property management moving forward.