Tenants battling tough competition for available flats and inflated utility bills are also being stung by sharply rising service charges, according to research carried out by Hamptons.
Hamptons found that in the past 12 months, leaseholders have seen their service charges shoot up by 8%, predominantly driven by the increased cost of building materials and insurance.
As of June 2023, the average annual service charge in England and Wales stood at £1,431 or £119 per month.
Services charges, which pay for the upkeep of communal areas in modern apartment blocks, tend to be lower in smaller blocks with fewer amenities, housing residents who are willing to carry out maintenance themselves.
In London, where service charges are typically higher than in other parts of the country, renters can expect to pay an average of £1,792.
“Commercial contracts for communal utilities are exempt from the energy price cap with many freeholders signing fixed commercial agreements at higher prices. This means it will take some time for prices to fall,” read the report.
Service charges saw a major increase between 2018 and 2019 reflecting an overhaul of fire-safety measures in the wake of the Grenfell Tower disaster which killed 72 residents in North Kensington.
Hamptons’ service charge index calculates the average amount the 5.4 million flat leaseholders in England & Wales hand over in service charges each year.
The Leasehold Advisory Service provides advice on calculating service charges and disputing payments.