Many leaseholders have seen the economic efficiencies of sharing a single roof with their neighbours steadily eroded by rising running costs. Traditionally, the cost of running a flat has been below what owners of houses spend over the long term. However, in recent years, large increases in management and compliance costs that aren’t paid by homeowners have upset the equilibrium.
Our analysis shows that the average leaseholder in England and Wales paid a service charge of £2,405 a year or £200.42 a month in 2025. Over the last five years, the average charge has risen by 32.6%, from £1,814 a year (£151.15 a month) in 2020 to £2,405 a year (£200.42 a month) in 2025, marking the first time the average service charge for a flat has passed £200 per month.
These rises have outstripped inflation more generally, with the average service charge ending 2025 4.6% higher than at the end of 2024, outpacing inflation by 1.2 percentage points.
Regionally, London has long had the highest service charges in the country and has also seen the largest increases in recent times. Here, the average charge stands at £2,801 (£233.45 a month), up 6.4% year-on-year, 41.2% over the last five years and 64.5% over the last decade. These higher charges reflect taller buildings, which offer more amenities and generally cost more to maintain.
Nationally, the average annual service charge of a one-bed flat is £2,074 (or £172.81 a month), up 3.3% on 2024. The average two-bed comes with an annual charge of £2,463 (£205.28 a month), up 4.8% on last year. And the average service charge on a three-bed comes in at £3,146 (or £262.16 a month), passing the £3,000 a year mark for the first time and up 5.7% on the same time last year.
Last year, 37% of flats across England and Wales had a service charge which exceeded 1% of their value, an increase from 29% five years ago. This figure matters because some mortgage lenders have tightened their underwriting criteria to exclude flats where service charges routinely exceed 1% of their value (a £4,000 annual service charge on a £300,000 flat for example).
Meanwhile, 14% of flats had a charge which exceeded 2% of its their value and 6% had a charge which exceeded 3% of its value. These were disproportionately city centre flats. With a more limited pool of lenders to choose from, it can make borrowing to buy a flat with a higher service charge both harder and more expensive. Last year, the average flat had a service charge of 0.90% of its value.
The increase in service charges as a share of value reflects both rising service charges and falling sales values. In much of the country, flat prices typically stand below where they were pre-pandemic in 2019, with one in five (19.9%) flat sellers in England & Wales last year, selling for less than they paid. Meanwhile, service charges has risen consistently over the same period.
While service charges cover apartment blocks with a wide range of amenities, higher charges can hit saleability. Last year, flats marketed with a service charge at or below 1% of its value were 50% more likely to find a buyer than those which came with charges equating to 2% or more.
The number of flats with low service charges has fallen sharply. Just 14% of flats come with a service charge of less than £100 per month, a figure which has halved from 34% over the last five years. Typically, these are found in low-rise blocks with minimal amenities.
While there is a regional element to lower service charges, the cheapest charges are often found in low-rise 1970s and 1980s builds which have stood the test of time well. 30% of flats in the North East still have a service charge of under £100 a month, followed by 28% in both the East Midlands and the South West.
Despite the government looking to cap ground rents, it is service charges which are usually the single largest cost for leaseholders by some margin. The unplanned nature of building maintenance means that they can’t be capped, but service charges often cover bigger administrative bills, with funds being diverted away from direct investment in bricks and mortar.
Meanwhile, the city centre flat boom which took off in the mid-1990s means many bigger blocks of flats are turning 30. This can mean that some of the big-ticket items like roofs, lifts and windows are approaching the end of their life. So, where there aren’t sufficient sinking funds in place, it’s inevitable that bigger service charge bills will be landing on the doormats and inboxes of leaseholders.
