Overcharged and overlooked: UK leaseholders continue to wait on government action against spiralling service charge costs

Written by: Richard Merrin, Justice for Property Rights

However, a recent survey of 2,000 UK-based leaseholders has shown - despite popular Westminster discourse - ground rent costs are not the number one concern amongst respondents. Instead, almost a third (31.5%) of respondents highlighted service charges as their main concern and by far the largest problem area out of eleven options, when it comes to owning a leasehold property.

Looking closely, ‘ground rent costs’ are currently in fifth on the priority list for leaseholders – with issues such as ‘restrictions on what I can do with my property’ being deemed a higher priority. These findings therefore beg the question: when will the government address the UK’s spiralling service charge scourge?

As with any product or service we purchase, understanding how a cost has been clearly calculated and explained helps contribute to improved trust. For leaseholders who have consistently paid increased service charges and seen no explanation or additional value, fears have rightfully been raised.

For onlookers who may be new to the leasehold debate currently rumbling on in the UK, they will see the issue of ground rent dominating the agenda and the main target of proposed reform. What they would fail to see is the growing discontent and concern around service charges impacting leaseholders. A failure from the government to sit down and speak with leaseholders about their concerns has resulted in opaque service charges and the concerns which they accompany failing to be addressed in the proposed legislative reform discussion.

Ground rent is fixed, predictable and known in advance from a leaseholder perspective. In comparison to service charges, which are variable, often compiling multiple costs that can rise unexpectedly and require leaseholders to assess invoices and management decisions beyond their control on a regular basis. Despite this, it is the former which dominates the calls from politicians for reform, rather than the largely opaque and costly latter.

When discussing legislative reform, the duty of government and Parliament is to ensure any amendments can stand the test of time and do not have far-reaching consequences for so many people.

Failing to address the worsening financial impact of service charges will leave leaseholders across the country in a pit of financial uncertainty and disarray. Research from property experts Hamptons reveals a rapidly increasing rate of service charge costs, with the average leaseholder in England and Wales paying £2,405 a year, or £200.42 a month, in service charge fees across 2025. Zooming out on the immediate costs, the last five years have seen the average charge increase by 32.6%, from £1,814 a year (£151.15 a month) in 2020 to £2,405 a year (£200.42 a month) in 2025.

Given the wider financial pressures facing the country, now is the time for long overdue action by the government to mitigate the spiralling service charge crisis facing leaseholders. Many of whom are ordinary working people who have to dig deeper to find more money every month for little or no additional value.

The government's continued silence on service charges is no longer a gap in policy - it's a failure to protect leaseholders from costs they can neither predict nor control. The evidence is clear: a near-third of leaseholders identify service charges - not ground rent - as their principal concern, and the Hamptons data confirms this is not a perception problem but a worsening financial burden accelerating year-on-year.

Legislative reform focusing solely on ground rent while leaving service charge transparency unchecked risks solving the wrong problem entirely. What leaseholders are asking for is not radical. Just the same standard of clarity applied to any other cost they are asked to pay: a clear breakdown of what they are paying for, why costs increase and what value (if any) it includes. Until that transparency exists, service charges will remain a source of financial anxiety that current reform proposals fail to address.

Commonhold is a good idea which was made law during Tony Blair's time. It will take a long time to become the primary form of ownership, allowing flat owners to be in charge of their buildings.

A much easier and quicker solution is to put the leaseholders in charge now. Strengthen the Right to Manage (RTM) in this legislation so that leaseholders take charge and become the client if they want to appoint a managing agent. This will fix the problem overnight.

However, the government solution is to cap ground rents at £250 pa and then confiscate all rent after 40 years, without any further index linking. The government’s own 2026 HM Land Registry EHS Annex 5 states that the mean ground rent is £124- £153. Given the 1000s of pounds in service charge, this focus on ground rents is not providing help where it is needed. Indeed, this proposed legislation has already seen the value of ground rents go down by as much as 70%, meaning our members have already lost 70% of their savings, as have many more pensioners and investors.

It created genuine outrage in the wider financial community about the UK’s investable reputation, especially retrospective interference in contracts where both parties would have received independent legal advice. It risks legal action by freeholders estimated at between £20 and £40 billion, underwritten by the UK taxpayers.

It also ultimately threatens to bankrupt our members, which is hugely dangerous for leaseholders. Is the government’s agenda, then, more against one group of property owners (freeholders) than for another group (leaseholders)? The current direction of travel looks like everyone loses?

The government has an opportunity to correct this oversight before making further long-term legislative changes. Leaseholders have made their priorities clear through their responses, and it is now up to Westminster to listen.

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Richard Merrin is a spokesperson for Justice for Property Rights.

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