What London Buyers Should Know About Service Charges
A clear, professional guide to one of the most misunderstood costs in London property
Service charges are not a footnote in London property ownership — they are a core financial commitment that affects affordability, resale value, and long-term enjoyment of a home. Buyers who overlook them often regret it later.
Here is what every London buyer should understand before committing.
1. What service charges actually cover
Service charges fund the shared operation and upkeep of a building or estate. They typically include:
Building insurance
Cleaning and lighting of communal areas
Lift maintenance
Concierge or security staff
Gardening and landscaping
Managing agent fees
Contributions to reserve or sinking funds
In new builds, charges often also include gyms, pools, cinemas, lounges, and rooftop spaces.
If it’s shared, you pay — whether you use it or not.
2. Typical service charge ranges in London
There is no single “normal” figure, but broad patterns exist:
Period conversions and small blocks: lower but less predictable
Modern apartment blocks: mid-range with more structure
Luxury new builds: high, but often more transparent
Buildings with concierge desks, pools, or extensive amenities almost always sit at the top of the range.
3. Service charges usually rise
This is critical.
Most service charges are estimates, not fixed bills. They can increase due to:
Inflation and labour costs
Energy price changes
Major repairs or safety upgrades
Expiry of developer warranties
Buyers should assume future increases and assess affordability accordingly.
4. The reserve (sinking) fund matters more than the headline number
A low service charge is not always good news.
A healthy reserve fund means:
Major works are planned and funded
Owners are less likely to face sudden large bills
Long-term maintenance is structured
A building with low charges and no reserve fund can become very expensive very quickly.
5. New builds vs older buildings
Each has different risks.
New builds
Lower charges initially
Increases once warranties expire
Amenities drive long-term costs
Older buildings
Often higher upfront charges
Costs can be more stable if well-managed
Risk of large one-off works if maintenance has been deferred
Ask for service charge histories wherever possible.
6. Managing agents make or break value
Two buildings with identical facilities can have very different service charges depending on management quality.
Red flags include:
Poor communication
Delayed repairs
Repeated “unexpected” costs
Lack of transparent accounts
Good management protects both lifestyle and resale value.
7. High service charges affect resale and lending
This is often underestimated.
High or rapidly rising service charges can:
Reduce buyer demand
Limit mortgage options
Impact valuation assumptions
Future buyers focus on monthly outgoings, not just asking prices.
8. Buyers have legal rights
Service charges are regulated.
Buyers and owners have the right to:
See a full cost breakdown
Challenge unreasonable charges
Be consulted on major works
Question managing agent performance
Charges must be reasonable and justifiable, not arbitrary.
9. Ask the right questions before you buy
Before exchanging contracts, buyers should ask:
What were the last three years of service charges?
How much is in the reserve fund?
Are any major works planned?
What amenities drive the cost?
How are costs apportioned between units?
If clear answers aren’t provided, pause.
Final Perspective
Service charges are not simply a running cost — they are a signal. They reveal how a building is managed, how future-proof it is, and how attractive it will be to the next buyer.
Smart London buyers don’t chase the lowest number.
They look for clarity, structure, and sustainability.