Can Service Charges Be Increased in the UK? What Leaseholders Need to Know
- Circle Doors
- 2 days ago
- 5 min read
If you own a leasehold flat or house in England or Wales, service charges are probably one of your biggest financial headaches — and with good reason. Charges have been rising sharply for years, yet many leaseholders have had little practical power to push back. So can your landlord or managing agent simply increase your service charges whenever they like? The short answer is: yes, but not without limits. Here's what you need to know.
What Are Service Charges?
Service charges are payments leaseholders make to their landlord (or freeholder) to cover the costs of maintaining and managing a building. This typically includes:
Building insurance
Cleaning and gardening
Repairs and maintenance
Major works (such as roof replacements or lift servicing)
Management fees
Reserve or sinking funds
The exact costs covered will depend on what's written in your lease, but most leaseholders are liable for a share of the building's running costs.
Can Service Charges Be Increased?
Yes — in most cases, service charges can be increased. But there are important legal protections that limit how and when this can happen.
Variable vs Fixed Service Charges
Most leaseholders pay a variable service charge, meaning the amount changes year to year based on the actual costs incurred. Under the Landlord and Tenant Act 1985, variable service charges must be:
Reasonably incurred — landlords cannot charge for unnecessary or overpriced work
Of a reasonable standard — works and services must be carried out to an acceptable level
Properly consulted on — for any single item of work costing more than £250 per leaseholder, landlords must follow the Section 20 consultation process before proceeding
Some leaseholders pay a fixed service charge (a set amount written into the lease), which is harder for a landlord to change unilaterally.
The 18-Month Rule
Landlords are generally prohibited from charging for costs that were incurred more than 18 months before a demand is issued — unless the leaseholder was given written notice of those costs within that timeframe. This prevents landlords from presenting leaseholders with unexpected large backdated bills.
Why Have Service Charges Been Rising So Much?
Service charge costs have been climbing steeply in recent years. The Financial Conduct Authority found that insurance charges in blocks of flats rose by an average of 125% between 2016 and 2021 alone. Inflationary pressures, post-Grenfell fire safety requirements, and a historically opaque system have all contributed to rising costs.
Queries about service charges now account for one in three of all enquiries to the Leasehold Advisory Service (LEASE) — a clear sign of how widespread the problem has become.
What Can You Do If Your Service Charges Seem Unreasonable?
You are not powerless. Several options are available:
1. Request a Summary of Costs
Under the Landlord and Tenant Act 1985, you have the right to request a written summary of the costs that make up your service charge. Your landlord must provide this within one month (or within six months of the end of the accounting year).
2. Inspect Supporting Documents
Following a summary request, you can then inspect the accounts, receipts, and supporting documentation to verify the charges.
3. Apply to the First-tier Tribunal
If you believe your service charges are unreasonable, you can apply to the First-tier Tribunal (Property Chamber) in England (or the Leasehold Valuation Tribunal in Wales) to have them assessed. The Tribunal can decide what amount is reasonable. Crucially, under current law, landlords often recover their legal costs from the service charge pot — but this is changing (see below).
4. Consider Right to Manage
Leaseholders can collectively exercise the Right to Manage (RTM), taking over responsibility for managing the building from the freeholder — without needing to prove any fault. This gives you direct control over who manages the building and what is spent.
What's Changing? The Leasehold and Freehold Reform Act 2024
A major overhaul of leasehold law is under way. The Leasehold and Freehold Reform Act 2024 received Royal Assent in May 2024 and introduces sweeping changes to service charge regulation — though much of it is being rolled out gradually through secondary legislation.
Key Reforms on the Way
Standardised Service Charge Demands Landlords will be required to issue service charge demands in a prescribed format, making it much easier for leaseholders to understand what they're paying for and to compare demands from year to year. If a landlord fails to comply with the required format, any non-payment or late-payment provisions in the lease will be rendered unenforceable.
Mandatory Annual Accounts and Reports For leaseholders paying variable service charges, landlords will be obliged to provide an annual statement of accounts prepared by a qualified accountant. This will give leaseholders a clear, verified breakdown of how their money has been spent.
Greater Access to Information Leaseholders will gain new rights to request supporting documentation — including contracts, invoices, receipts, and written explanations of how spending decisions were made — giving far greater ability to scrutinise charges.
Fairer Litigation Costs One of the most significant changes is the shift in legal costs. Currently, landlords can often recover their tribunal litigation costs from the service charge — effectively making leaseholders fund the landlord's legal bills even when the landlord loses. The new Act reverses this default: landlords' litigation costs will not automatically be recoverable as a service charge, while leaseholders will gain the right to claim their own costs from their landlord.
Protection for Fixed-Charge Leaseholders Previously, the protection against excessive service charge demands applied mainly to those paying variable charges. The 2024 Act extends these protections to those paying fixed charges too.
Reforms to Major Works (Section 20) The consultation that ran from July to September 2025 also proposed reforms to the Section 20 major works process — including mandatory Asset Management Plans and sinking funds — to prevent leaseholders being hit with unexpected, very large one-off bills.
What's the Current Status (April 2026)?
The 2024 Act is law, but implementing it requires around 25–30 pieces of secondary legislation — detailed regulations that set out exactly how the reforms will work in practice. A major government consultation on service charges and managing agents ran from July to September 2025. The government is now reviewing responses and drafting the necessary regulations.
In January 2026, the government published a draft Leasehold and Commonhold Reform Bill, with ministers stating their intention to make commonhold the default for new flats, effectively replacing the leasehold system in the long run.
A judicial review challenge by freeholders — including some high-profile aristocratic estates — against key parts of the Act was dismissed by the High Court in October 2025, clearing the path for implementation to proceed.
Until the secondary legislation is in place, the existing laws still apply. But the direction of travel is firmly in favour of greater leaseholder protection.
Key Takeaways
Landlords can increase variable service charges, but increases must be reasonable and properly documented.
You have the right to challenge unreasonable charges at the First-tier Tribunal.
The Leasehold and Freehold Reform Act 2024 is the most significant reform to leasehold law in decades, introducing standardised demands, mandatory accounts, and fairer litigation costs.
Full implementation is still underway — watch for new secondary legislation through 2026.
If you're struggling with high or opaque service charges, contacting the Leasehold Advisory Service (LEASE) at lease-advice.org is a good first step.
Need Expert Advice on Your Service Charges?
Navigating service charges, leasehold disputes, and the evolving reform landscape can be complex. If you're a leaseholder who needs professional guidance, our Compliance Advice Service is here to help. We work with leaseholders to understand their rights, review service charge demands, and take the right steps to challenge unfair costs.
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