Average service charges for flat leaseholders in England and Wales have exceeded £200 per month for the first time, reaching £2,405 a year in 2025, according to new research from Hamptons.
Chart 1 – Average annual service charge (England & Wales)
The 4.6% annual rise means service charges have now grown 32.6% over five years and 55.6% over the past decade, outpacing Consumer Price Index (CPI) inflation, which rose 30.9% and 39.8% over the same periods. In the past year alone, service charges rose 1.2 percentage points faster than CPI, which came in at 3.4%.
London carries the highest charges in the country, with the average now standing at £2,801 a year (£233.45 a month), up 6.4% year-on-year, 41.2% over five years and 64.5% over the decade. Higher costs in the capital typically reflect taller buildings with more amenities and greater running costs.
Nationally, charges vary by flat size. The average one-bed carries an annual service charge of £2,074 (£172.81 a month), up 3.3% on 2024. For a two-bed, the average is £2,463 (£205.28 a month), up 4.8%, while the average three-bed now attracts a charge of £3,146 (£262.16 a month), up 5.7% and passing the £3,000 annual mark for the first time.
Chart 2 – Average annual service charge (England & Wales)
Mortgage lending implications
Rising service charges are also creating complications for buyers seeking mortgage finance. Last year, 37% of flats had a service charge exceeding 1% of their value, up from 29% five years ago. Some lenders have tightened criteria to exclude flats where charges routinely surpass that threshold — for example, a £4,000 annual charge on a £300,000 flat.
A further 14% of flats had charges exceeding 2% of their value, and 6% exceeded 3%, with city centre flats disproportionately represented at these levels. The average flat carried a service charge equal to 0.90% of its value last year.
The trend reflects both rising charges and falling flat values. In much of the country, flat prices remain below their pre-pandemic 2019 levels, with one in five (19.9%) flat sellers in England and Wales last year achieving less than they originally paid.
High service charges are also affecting saleability. Flats with a charge at or below 1% of their value were 50% more likely to find a buyer last year than those with charges of 2% or more.
Chart 3 – Average annual service charge as a share of value (England & Wales)
The proportion of flats with lower service charges has fallen sharply. Just 14% now have a charge below £100 per month, down from 34% five years ago. These tend to be low-rise blocks with minimal amenities. Regionally, the cheapest bills are most common in the North East, where 30% of flats still fall below the £100 monthly threshold, followed by 28% in both the East Midlands and the South West. Many of these are 1970s and 1980s builds that have kept costs relatively contained.
Chart 4 – Flats with a sub £100 per month service charge (England & Wales)
"Many leaseholders have seen the economic efficiencies of sharing a single roof with their neighbours steadily eroded by rising running costs," said David Fell, lead analyst at Hamptons. "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."
"While the government is looking to cap ground rents, it is service charges which are usually the single largest cost for leaseholders by some margin. But the unplanned nature of building maintenance means that they can't be capped. However, the squeeze on leaseholders' pockets has been exacerbated by bigger administrative bills, with funds being diverted from direct investment in bricks and mortar."
"The city centre flat boom, which took off in the mid-1990s, means many bigger blocks of flats are now turning 30. This can mean that big-ticket items such as 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."
