From James Lockett

Research from property management specialists, Keller Williams UK, has found that the majority of leasehold homeowners consider service charges unfair, with a lack of transparency around how they are spent also a prominent issue. 

Along with ground rents, service charges will be paid by some leaseholders to cover the cost of maintaining the building in which their property is located. They can also be charged by the owner of a building for any work required to maintain the value of the property. While there is no cap on what can be charged, the owner or landlord does have to prove the cost is justified in line with any work carried out.

Generally, service charges will cover the ongoing upkeep of a building with multiple residences, including but not limited to the cleaning of communal areas, heating the building, staff costs such as a concierge, building insurance, maintenance and repairs and groundskeeping. 

Of course, this cost can vary regionally and Keller’s research shows that the average service charge will cost leasehold homeowners in excess of a thousand pounds in London (£1,900), the South East (£1,301), the East of England (£1,182) and the South West (£1,121), while in the North East it averages around £650. 

So while service charges can be hefty they do play an important role in maintaining leasehold homes and so it’s perhaps surprising that Keller Williams found that 74% of leasehold homeowners don’t think it’s fair to charge them. 

However, the research also shows this could be down to how their money is spent, rather than the requirement of paying to upkeep the building itself. 

A huge 96% of leasehold homeowners said they would like to see more transparency on how their service is calculated and why they are paying the required sum.  

CEO of Keller Williams UK, Ben Taylor, commented:

“Service charges are an integral part of maintaining the wider community areas and standards of living in many leasehold buildings and so it’s quite surprising that so many leasehold homeowners believe them to be unfair. 

Of course, this attitude seems to stem from a lack of transparency on how they are spent, rather than having to pay them in the first place.

I think many appreciate that their service charge could increase should there be a substantial maintenance job required. However, this friction point between leaseholder and freeholder could be greatly reduced by placing an emphasis on educating and informing leaseholds as to how their money is being spent.”

Do you think it’s fair to charge service charges for the upkeep of leasehold homes?
Answer	Respondents
No	74%
Yes	26%
Do you think there should be more transparency on how service charges are charged and spent?
Answer	Respondents
Yes	96%
No	4%

Survey of 1,203 leasehold homebuyers (last six months) carried out by Keller Williams UK (8th April 2021).

Table shows average service charge by region
Location	Average service charge (2021)
London	£1,900
South East	£1,301
East of England	£1,182
South West	£1,121
North West	£944
West Midlands region	£894
East Midlands	£860
Yorkshire and the Humber	£824
North East	£649
Source: Keller Williams UK

END

Notes to editors:-

●        Survey carried out via consumer research platform Find Out Now

●        Keller Williams are the largest real estate business in the world with 190,000 agents and having rapidly expanded in recent years to 50 countries – founded in Austin, Texas by Gary Keller, Executive Chairman

●        Home sales via Keller Williams topped one million transactions last year

●        Keller Williams UK operates from 12 regional market centres across the country comprising over 300 estate agents, adding substantial numbers of new agents each month

●        Ben Taylor is the CEO of Keller Williams UK and a major shareholder in the region and many of its market centres. He is formerly the Managing Director of John D Wood, a Countrywide PLC brand