Soaring Service Charges on Leasehold Flats Hit Capital Values
Average service charges on leasehold flats have exceeded £200 per month for the first time, according to reports published by The Negotiator, Landlord Today and Property Wire.
New research shows the average service charge across England and Wales reached £2,405 in 2025 - the equivalent of £200.42 per month - marking a 4.6% annual increase. Over five years, charges have risen by more than 32%, and are up over 55% compared with a decade ago, significantly outpacing inflation.
London remains the most expensive region, with average annual charges of £2,801, while larger flats typically attract higher bills, with three-bedroom properties seeing some of the steepest costs.
The reports suggest that rising management, maintenance and compliance expenses are driving the increases. However, the impact is now being felt beyond household budgets. Growing service charges are increasingly affecting mortgage lending decisions and buyer appetite, particularly where costs exceed 1% of a flat’s capital value - a threshold some lenders treat with caution.
Industry observers warn that escalating service charges are beginning to weigh on flat values and marketability, eroding the affordability advantage that leasehold apartments have traditionally held over houses.
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