• Menu
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Before Header

  • Home
  • What is LKP
  • Find everything …
  • Contact
Donate

Leasehold Knowledge Management Logo

Secretariat of the All Party Parliamentary Group on leasehold reform

Mobile Menu

  • Home
  • What is LKP
  • Find everything …
  • Contact
  • Advice
  • News
    • Find everything …
    • About Peverel group
    • APPG
    • ARMA
    • Bellway
    • Benjamin Mire
    • Brixton Hill Court
    • Canary Riverside
    • Charter Quay
    • Chelsea Bridge Wharf
    • Cladding scandal
    • Competition and Markets Authority / OFT
    • Commonhold
    • Communities Select Committee
    • Conveyancing Association
    • Countrywide
    • MHCLG
    • E&J Capital Partners
    • Exit fees
    • FirstPort
    • Fleecehold
    • Forfeiture
    • FPRA
    • Gleeson Homes
    • Ground rent scandal
    • Hanover
    • House managers flat
    • House of Lords
    • Housing associations
    • Informal lease extension
    • Insurance
    • IRPM
    • JB Leitch
    • Jim Fitzpatrick MP
    • John Christodoulou
    • Justin Bates
    • Justin Madders MP
    • Law Commission
    • LEASE
    • Liam Spender
    • Local authority leasehold
    • London Assembly
    • Louie Burns
    • Martin Paine
    • McCarthy and Stone
    • Moskovitz / Gurvits
    • Mulberry Mews
    • National Leasehold Campaign
    • Oakland Court
    • Park Homes
    • Parliament
    • Persimmon
    • Peverel
    • Philip Rainey QC
    • Plantation Wharf
    • Press
    • Property tribunal
    • Prostitutes
    • Quadrangle House
    • Redrow
    • Retirement
    • Richard Davidoff
    • RICS
    • Right To Manage Federation
    • Roger Southam
    • Rooftop development
    • RTM
    • Sean Powell
    • SFO
    • Shared ownership
    • Sinclair Gardens Investments
    • Sir Ed Davey
    • Sir Peter Bottomley
    • St George’s Wharf
    • Subletting
    • Taylor Wimpey
    • Tchenguiz
    • Warwick Estates
    • West India Quay
    • William Waldorf Astor
    • Windrush Court
  • Parliament
  • Accreditation
  • [Custom]
Menu
  • Advice
  • News
      • Find everything …
      • About Peverel group
      • APPG
      • ARMA
      • Bellway
      • Benjamin Mire
      • Brixton Hill Court
      • Canary Riverside
      • Charter Quay
      • Chelsea Bridge Wharf
      • Cladding scandal
      • Competition and Markets Authority / OFT
      • Commonhold
      • Communities Select Committee
      • Conveyancing Association
      • Countrywide
      • MHCLG
      • E&J Capital Partners
      • Exit fees
      • FirstPort
      • Fleecehold
      • Forfeiture
      • FPRA
      • Gleeson Homes
      • Ground rent scandal
      • Hanover
      • House managers flat
      • House of Lords
      • Housing associations
      • Informal lease extension
      • Insurance
      • IRPM
      • JB Leitch
      • Jim Fitzpatrick MP
      • John Christodoulou
      • Justin Bates
      • Justin Madders MP
      • Law Commission
      • LEASE
      • Liam Spender
      • Local authority leasehold
      • London Assembly
      • Louie Burns
      • Martin Paine
      • McCarthy and Stone
      • Moskovitz / Gurvits
      • Mulberry Mews
      • National Leasehold Campaign
      • Oakland Court
      • Park Homes
      • Parliament
      • Persimmon
      • Peverel
      • Philip Rainey QC
      • Plantation Wharf
      • Press
      • Property tribunal
      • Prostitutes
      • Quadrangle House
      • Redrow
      • Retirement
      • Richard Davidoff
      • RICS
      • Right To Manage Federation
      • Roger Southam
      • Rooftop development
      • RTM
      • Sean Powell
      • SFO
      • Shared ownership
      • Sinclair Gardens Investments
      • Sir Ed Davey
      • Sir Peter Bottomley
      • St George’s Wharf
      • Subletting
      • Taylor Wimpey
      • Tchenguiz
      • Warwick Estates
      • West India Quay
      • William Waldorf Astor
      • Windrush Court
  • Parliament
  • Accreditation
You are here: Home / Latest News / Average service charges are £1,863, but rise to £2,777 for new builds

Average service charges are £1,863, but rise to £2,777 for new builds

March 9, 2016 //  by Sebastian O'Kelly

The average annual property service charge in Britain is £1,863The service charges for new builds are 96 per cent higher than older properties and average £2,777

Ground rents are on average £371 a year for new build and £327 for pre-2016 properties.

A third (33 per cent) of management companies have increased service charges in the last two years

Service charges vary between £1.55 per square foot to £7 per square foot

The case for selling all new flats with a residents’ management company included in the leases – which would immediately empower all leasehold purchasers – was made stronger by research reported today by the insurer Direct Line for Business.

It revealed that property service charges are rising rapidly with a third (33 per cent) of management companies increasing these fees in the last two years.

The average service charge or fees leaseholders pay to cover their share of the overall building maintenance, now stands at £1,863.

In addition, ground rents are being ramped up as develops seek to embed value into the freehold, which are highly desirable investment assets (and which, of course, have to be offered first to leaseholders, although this legal requirement is easily worked around).

For buy-to-let landlords the service charge costs represent more than two months of the average monthly rental income, which stands at £9,062 annually.

The service charges for new build properties, coming on the market in 2016 are significantly greater than for older dwellings at £2,777.

This is 96 per cent higher than the average for an older property.

Service charge levels also vary markedly between developments. The Guardian reports this story today hereGuardianServiceCharges

One new build development coming onto the market in Croydon in 2016 will see home owners paying £1.55 per square foot in service charges, while a development in Lambeth coming onto the market in 2017 is charging four and a half times more at £7 per square foot.

Solicitor Scott McCabe organised the right to manage at Imperial Hall, in Old Street, just north of the City, in order to unburden himself of Sterling Estates Management, which had been imposed on the 49 residents by freeholder Columbia House Properties (No 3).

They then decided to send the freeholder packing, too, through enfranchisement.

The freehold has cost the 49 residents who took part £404,000, – £571,000 including all costs involved.

“It is amazing what we had to put up with while the former freeholder only had a measily £404,000 of value in our property,” says McCabe, who comes from Australia where English leasehold law does not exist.

“Nearly every flat in this building is worth as much or much more than that. This underlines the scandal of the whole leasehold business in this country.”

Direct Line says add-on features such as libraries, 24 hour concierge services, gyms and cinema rooms contribute to the increased cost of service charges,.

Recent moves by developers have seen more private housing stock owned by freeholders subject to service charges.

Owners of freehold properties situated on private roads or private estates are being charged for upkeep of roads and gardens.

In one example owners of every four-bedroom property situated on a development in Guildford are charged £900 a year for upkeep of the road and communal gardens.

Would-be home buyers would be well advised to tell developers attempting this sort of nonsense to remove these clauses and sources for future dispute immediately.

Persimmon even favours building leasehold houses, which is an astonishing try-on.

PersimmonCutNick Breton, Head of Direct Line for Business says: “Service charges are often a hidden cost, which should be factored in when considering the affordability of a property.

“In some cases service charges are uncapped [surely almost all cases?] and can escalate rapidly.

The method for calculating service charges also varies between developments.

In some cases it is a flat rate for all properties, while for others it is determined by the number of bedrooms or the square footage of a property.

Service charges usually cover repairs to communal areas of a development such as windows, drainage and the roof. They may also be used to establish a sinking fund for major renovations. In some cases they are also used to pay for shared services such as gardeners, landscapers, concierge services or cleaners.

Related posts:

Burj Khalifa: Pay the service charges, or we will switch off the lifts Rectory Court slashes service charges after dumping Stonewater for right to manage LKP accredited managing agent Default ThumbnailHeirs of empty retirement leasehold flat now face doubled council taxes … on top of plummeting re-sale value, on-going service charges and an exit fee if it ever does sell Outrageous: Persimmon builds leasehold houses – for the never ending income stream Government announces regulator to protect leaseholders and their £4 billion in service charges

Category: Latest News, Persimmon, PressTag: Direct Line, Persimmon, Scott McCabe, Sterling Estates Management, The Guardian

Sign up to the LKP newsletter

Fill in the link here

Latest Tweets

Tweets by @LKPleasehold

Mentions

Anthony Essien (34) APPG (44) ARMA (92) Benjamin Mire (32) Cladding scandal (71) Clive Betts MP (33) CMA (46) Commonhold (56) Competition and Markets Authority (42) Countryside Properties plc (33) FirstPort (55) Grenfell cladding (56) Ground rents (55) Israel Moskovitz (32) James Brokenshire MP (31) Jim Fitzpatrick (36) Jim Fitzpatrick MP (31) Justin Bates (41) Justin Madders MP (75) Katie Kendrick (41) Law Commission (61) LEASE (68) Leasehold Advisory Service (65) Leasehold houses (32) Liam Spender (42) Long Harbour (55) Lord Greenhalgh (32) Martin Boyd (87) McCarthy and Stone (43) National Leasehold Campaign (42) Persimmon (49) Peverel (61) Property tribunal (49) Retirement (38) Robert Jenrick (33) Roger Southam (47) Sajid Javid (38) Sebastian O’Kelly (67) Sir Peter Bottomley (211) Taylor Wimpey (106) Tchenguiz (33) The Guardian (33) The Times (34) Vincent Tchenguiz (45) Waking watch contracts (40)
Previous Post: « Leaseholders need ‘counselling and relationship advice’, says LEASE chair Dr Sigmund Southam
Next Post: Spreading Paine: the freeholds owned by Martin Paine and his wife (Margaret) Anne Kirmond »

Reader Interactions

Comments

  1. Leaseholder

    March 10, 2016 at 8:59 am

    Ground rents should revert to peppercon and service charges should become about real, rather than fictional services.
    It’s about time the parliament cleated this mess, with house prices being what they are, this is only getting worse.

    Most corrupt managing companies- and there are many shell ones out there- know how to bypass the rules. For example, they are obligated, by law, to consult the leaseholders before entering 12+ month contracts. So all they have to do, is not enter the contract, keep the service charge demand vague, no one knows what they pay for. Simple.

Above Footer

Advising leaseholders. Avoiding disasters.
Stopping forfeiture. Exposing abuses. Urging reform.

We depend on individuals for the majority of our funding.

Support Us and Donate

LKP Managing Agents

Become an LKP Managing Agent

Common Ground
Adam Church
Blocnet property management2

Stay in Touch

To achieve victory in the leasehold game where you are playing against professionals and with rules that they know all too well - stay informed with the LKP newsletter.
Sign Up for Newsletter

Professional Directory

The following advertisements are from firms that seek business from leaseholders.
Click on the logos for company profiles.

Barry Passmore

Footer

About LKP

  • What is LKP
  • Privacy and data

Categories

  • News
  • Cladding scandal
  • Commonhold
  • Law Commission
  • Fleecehold
  • Parliament
  • Press
  • APPG

Contact

Leasehold Knowledge Partnership
Open Data Institute
5th Floor
Kings Place
London N1 9AG

sok@leaseholdknowledge.com

Copyright © 2025 Leasehold Knowledge Partnership | All rights reserved
Leasehold Knowledge Partnership Limited (company number: 08999652) is a company limited by guarantee that is a registered charity (number: 1162584) with the Charities Commission.
LKP website is hosted at www.34sp.com
Website by Callia Web