The average UK service charge bill stands at £2,880 per leaseholder in 2026, an increase of 5.8% since 2024, according to The Property Institute’s (TPI) annual Service Charge Index.
The Index covers 2,137 residential estates and 117,052 leasehold homes, drawn from 13 managing agent firms, and provides a detailed breakdown of costs across residential blocks with 10 or more flats of different building heights, ages and expenditure categories.
Leaseholders in the bottom tenth percentile of TPI’s dataset are paying an average service charge of £1,525 a year, while those in the top tenth are paying £8,680, reflecting substantial differences in building age, height, complexity and the services provided.
While average service charge rises are in line with inflation, they coincide with an increase in reserve funds – money set aside over time to pay for major planned works – which have risen by 26% since 2024 and account for 16.4% of total budgeted spend in 2026.
Building Safety Act compliance costs have risen 53% since 2024, although they still represent a relatively small proportion of the overall bill at 1.5% of total budgeted spend for 2026.
On-site staffing costs – including concierge services, on-site building managers and maintenance managers – are up 11%, while management fees have risen by 2%. Building insurance costs have fallen by 4% cumulatively, although they remain significantly above pre-2020 levels.
TPI’s index found the type, height, and age of a building have a substantial bearing on service charge costs. Leaseholders in buildings of more than 18m pay an average of £4,447 a year, compared with £2,418 for those in buildings under 11m. Leaseholders in buildings more than 50 years old pay an average of £5,208 a year, compared with £2,508 for those in buildings less than 25 years old.
Andrew Bulmer, chief executive officer of The Property Institute, said: “The fact that service charges have broadly tracked inflation over the past few years will provide a degree of reassurance for leaseholders. We hope this Index provides some clarity on how that money is being spent and why certain types of buildings cost more to repair and maintain. There is no silver bullet that will make service charges disappear, but they can and should be made far more predictable and transparent.
“We want mandatory reserve funds, long-term capital expenditure plans and a fully regulated profession to give residents the confidence that, when they move into a new home, the building is financially prepared for the future and managed by people who are qualified, competent and accountable. For most people, a home represents the single greatest financial commitment of their lifetime, and yet under the current system too many people are moving without visibility on the long-term financial resilience and professional management of their building.”
