Earlier this year, TPI (The Property Institute) published their first residential Service Charge Index Report which aimed to explain the drivers behind the rising costs and address concerns around escalating service charges.
The report shows that the average service charge has increased 41% since 2019 compared with an inflation rate of 23% over the same period.
The data has been compiled from the following:
- 13,074 homes across 108 estates
- 46% are estates with blocks 18 metres or above
- 29% are estates with blocks 11-18 metres
- 25% are estates with blocks below 11 metres.
How much did service charges increase in 2023-2024?
The average service charge cost per estate rose 3% to £3,634 per leaseholder.
What service charge costs have increased the most?
The report shows significant increases in Building Insurance, Utilities, Repairs & Maintenance, Health and Safety and Management Fees.
Buildings insurance increased 17%, repairs and maintenance 15%, contributions to reserve funds 15% but the highest was onsite staff costs which rose 24%.
Increases between 2019 and 2024
- Buildings insurance rose 92%.
- Utilities increased 73%
- General health & safety rose 40%.
Small sample
This is TPI’s first Service Charge Index, and the sample is taken from only 108 estates, with no indication of buildings age or location.
Like other managing agents, we feel that an increased data sample would provide better evidence, and we look forward to next year’s report which should have regional breakdowns.
At Charles Cox, our residential service charge accounts are administered by an experienced team of financial and property experts. We keep our costs down by using trusted local business contractors, the latest technology, as well as our own repair and maintenance teams and in-house consultants.
Download the full report.
