Why service charges in flats spiralled out of control

Published On Nov 24, 2024, 8:54 PM

Homeowners in England and Wales are facing soaring service charges, often ranging from 320% to 500% increases over recent years, creating significant financial distress for many. Politicians have long promised reforms to the leasehold system, and the government has recently committed to consultations aimed at abolishing leasehold. However, the situation has been worsened by lack of transparency and accountability from freeholders and managing agents, some of whom are accused of exploiting homeowners. The average service charge has risen to £2,321, a 44% increase since 2016, while in London, the average is now £2,500, up 52%. Campaigners suggest the system is archaic and calls for better regulation and potential new legal frameworks like commonhold are being discussed. Meanwhile, frustrations among leaseholders continue to escalate as the reforms may take time to implement.