According to Hamptons’ analysis of flats for sale, this may impact mortgage options, as some lenders have tightened underwriting criteria to exclude flats where service charges routinely exceed 1% of the value.
Some 14% of flats had a service charge exceeding 2% of the value and 6% of flats had a charge exceeding 3%, with flats in city centres disproportionately affected by higher charges. Last year, the average flat had a service charge equal to 0.9% of its value.
Hamptons said service charges rising in relation to property prices reflected the falling value of flats. Across most of the country, flat prices are lower than pre-pandemic 2019 levels and 19.9% of flat sellers in England and Wales sold their home for less than it was purchased. Meanwhile, service charges have consistently risen over the period.
Higher charges can also impact how attractive a flat is to buyers, as in 2025, flats with a service charge at or less than 1% of their value were 50% more likely to secure a buyer than those equating to 2% or more.
Meanwhile, the number of flats with low service charges has declined sharply. Only 14% of flats have a service charge of less than £100 per month, compared to 34% in 2020, and these are usually in blocks with minimal amenities.
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Hamptons said that while this did depend on the region, the cheapest service charges were usually in low-rise properties built in the 1970s and 1980s. Around 30% of flats in the North East have a service charge of less than £100 per month, followed by 28% in both the East Midlands and South West.
Service charges exceed £200 a month for first time
The average leaseholder of a flat in England and Wales paid £2,405 per year in service charges, equating to £200.42 per month – the first time the bill has exceeded £200.
This was 4.6% higher than the year before.
In the last five years, the average service charge has become 32.6% more costly, increasing from £1,814 per year or £151.15 per month in 2020.
Hamptons said the increases had outpaced inflation, rising 1.2 percentage points faster than the Consumer Price Index (CPI) in 2025, which rose 3.4% over the same period.
Similarly, CPI has risen by 30.9% over the last five years compared to the 32.6% increase in service charges, and over the last decade, service charges have gone up 55.6% compared to a 39.8% growth in CPI.
Most expensive service charges in London
London had the highest service charges in the country and has also seen the largest increases in recent years.
The average charge in the city is £2,801 per year or £233.45 per month, an increase of 6.4% compared to last year, 41.2% since 2020 and 64.5% over the last 10 years.
These higher charges were typically found in taller buildings with more amenities.
Nationally, the average annual service charge of a one-bed flat was £2,074 in 2025 or £172.81 per month, 3.3% higher than the previous year. The average two-bed flat had an annual charge of £2,463, or £205.28 per month, 4.8% up on the last year. Meanwhile, the average three-bed had a charge of £3,146 or £262.12 per month, exceeding £3,000 per year for the first time and up 5.7% year-on-year.
The economic efficiencies of a flat ‘steadily eroded’
David Fell, lead analyst at Hamptons, said: “Many leaseholders have seen the economic efficiencies of sharing a single roof with their neighbours steadily eroded by rising running costs.”
Fell said traditionally, the cost of running a flat was lower than what house owners would spend over the long term.
He added: “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 [that] 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.”
