Service charges on leasehold properties across England and Wales have risen by an average of 11% to £2,300 by the end of 2024, according to Hamptons’ latest Service Charge Index.
This growth was over four-times the Consumer Price Index (CPI) inflation rate of 2.5% for the same period.
Increasing utility bills initially contributed to inflation, followed by surging wage and insurance costs, resulting in the largest rise in service charges recorded.
Average annual service charges surpassed £2,000 in every region of England for the first time, though they remained below this threshold in Wales.
The North East saw service charges rise 60.9% since 2019, compared to a more modest 27.7% increase in the Southern regions of England.
This difference was largely due to the growing number of amenity-rich buildings in Northern cities, which include features like lifts, gyms, and concierge services, pushing costs higher.
The North West experienced a 57.6% rise in service charges, while Yorkshire & Humber saw an increase of 40.2%.
In contrast, the four Southern regions – London, South East, South West, and East – saw service charges rise in line with inflation at 27.7%.
The average service charge for a one-bedroom flat in England and Wales surpassed £2,000 for the first time, hitting £2,007 annually.
Two-bedroom flats now incur charges averaging £2,351, while three-bedroom flats face £2,977 per year.
This reflects not only property size but also the complexities and costs of maintaining larger properties.
Properties with lifts carry a 16% premium in service charges, gyms add 24%, and concierge services result in a 39% increase.
David Fell, lead analyst at Hamptons, said: “As service charges rise, there is growing pressure for leaseholders to have a more significant say in how their money is spent.
“While the Leaseholder Reform Bill touches on these issues, changes in how service charges are managed and allocated in the future might be on the horizon, potentially influencing future property development and how buildings are managed longer term.”
