If you live in a leasehold flat in the UK, you are almost certainly paying a service charge. The average leaseholder now budgets £2,880 per year for these costs, according to the latest industry data covering over 117,000 homes. That figure alone tells you why transparency matters — but the real story is in the range. Some households pay as little as £1,525, while others face bills of £8,680 or more. The difference often comes down to how clearly those charges are explained and justified.
I have been writing about property costs in the UK for years, and the question I hear most often from leaseholders is simple: “How do I know I am not being overcharged?” Until recently, the answer was frustratingly vague. Service charge demands varied wildly between buildings, and getting access to the underlying invoices or contracts felt like pulling teeth. That is changing now. New rules under the Leasehold and Freehold Reform Act 2024 are forcing landlords to be far more open about what they charge and why. This article walks through what those rules mean for you, where leaseholders still get caught out, and how to check whether your own service charge stands up to scrutiny. Here is what you actually need to know.
If you are trying to get a handle on your own building’s costs, a good first step is to compare your charges against these benchmarks. You can also read our broader guide on understanding tenant service charges for a wider view of what to expect. And if you suspect something is off, a tenant landlord lawyer can help you check whether your rights are being respected.
What Service Charge Transparency Actually Means Now
The most important change is that transparency is no longer optional. Before the Leasehold and Freehold Reform Act 2024, a landlord could send a one-line demand saying “service charge: £3,000” and leave you to guess what it covered. That is no longer allowed. The demand must now include a breakdown of the annual budget, the period it covers, and a clear statement of your rights. If it does not, the demand may be unenforceable.
What I notice when I look at the data is that the buildings with the highest charges are often the ones where transparency has been weakest. The TPI Service Charge Index shows that buildings over 50 years old average £5,208 per year — more than double the £2,508 for buildings under 25 years old. Older buildings tend to have more complex maintenance histories and more opaque billing. The new rules are designed to close that gap by forcing landlords to show their working.
Why the New Rules Matter for Your Wallet
The practical impact of these changes is straightforward: you now have legal tools to challenge charges that do not add up. The government’s 2025 consultation identified four core problems the new rules aim to fix: a lack of standardised demand formats, inconsistent or delayed annual accounts, limited access to supporting documents, and high dispute costs. Each of those problems directly affected how much leaseholders paid.
Consider the 18-month rule. Under the Landlord and Tenant Act 1985, landlords already had a time limit on recovering old costs, but the new rules tighten it significantly. If a landlord tries to bill you for work done 20 months ago without having served the proper notice within the 18-month window, you can refuse to pay. That is a concrete protection, not a theoretical one.
Insurance is another area where transparency has been poor. Under LAFRA 2024, landlords must now disclose any commission or payment they receive from building insurance policies. If they fail to do so, they cannot recover the insurance premium through the service charge at all. Given that insurance costs have been one of the fastest-rising components of service charges in recent years, this is a meaningful check.
For a deeper look at how these rules apply in a commercial context, our guide on successfully renting commercial properties covers similar transparency principles. And if you are dealing with a dispute, speaking to a tenant landlord lawyer early can save you thousands in tribunal costs.
Where Leaseholders Still Get Caught Out
Even with stronger rules, I see the same patterns of confusion and overpayment repeating. Here are the most common mistakes leaseholders make — and how to avoid them.
Accepting a Demand Without a Budget
The law now requires the annual budget to accompany the demand at the start of the service charge year. If your landlord sends a demand without a budget, that demand may be unenforceable. Yet many leaseholders simply pay it, assuming the figure is correct. My advice: if no budget arrives with the demand, ask for it in writing. If it does not come within a reasonable time, you may have grounds to withhold payment until it does.
Ignoring the 18-Month Deadline
This is the one that catches most people. A landlord cannot recover costs incurred more than 18 months before the demand is issued, unless they served a prescribed notice within that window. If you receive a demand for work done two years ago, check the date carefully. The new rules for service charge accounting make this deadline stricter than before. Do not assume the landlord’s timing is correct — verify it.
Not Requesting Supporting Documents
You now have the right to request contracts, invoices, insurance policies, fire risk assessments, and historic records going back six years. Landlords must respond promptly. If they refuse or delay, you can take the issue to tribunal. The catch is that you have to ask. Many leaseholders do not know this right exists, so they never exercise it. If your service charge seems high, request the invoices for the largest line items — cleaning, lift maintenance, and insurance are good places to start.
Paying Legal Costs You Shouldn’t Have To
Under the Leasehold and Freehold Reform Act 2024, the presumption that leaseholders pay landlords’ legal costs in disputes has been removed. If you challenge a service charge and the landlord hires a solicitor, you are not automatically on the hook for those fees. A tribunal can still order you to pay, but only in specific circumstances. This change alone has made it far less risky for leaseholders to challenge unreasonable charges.
For a practical comparison of how these rules differ between residential and commercial leases, our article on negotiating break clauses explains the escape routes available in commercial settings. And if you are dealing with a dispute over a specific charge, a tenant landlord lawyer can advise on whether the charge is recoverable.
→ Scroll right to see all columns
| Building Height | Average Service Charge | Key Cost Driver |
|---|---|---|
| Under 11m | £2,418 | General maintenance |
| 11–18m | £3,507 | Building safety compliance |
| Over 18m | £4,447 | Fire safety + reserve funds |
How to Check Your Service Charge and Challenge It If Needed
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The steps below walk through what to do with your service charge demand, from opening the envelope to deciding whether to challenge it. Each step builds on the legal rights described above.
Step One: Check the Format of Your Demand
Your demand must be in the prescribed format set out under LAFRA 2024. It should include the landlord’s name and address, your name and address, the total amount demanded, the period it covers, payment deadlines, and a summary of your rights. If any of these are missing, the demand may be unenforceable. Compare it against the checklist in the feature cards above. If something is missing, write to the landlord pointing out the omission and ask for a compliant demand.
Step Two: Compare Your Charges Against Benchmarks
Use the table above to see how your building’s charges compare by height and age. If your building is under 11m and you are paying £3,500, that is well above the £2,418 average — worth investigating. If your building is over 50 years old and you are paying less than £5,208, you may be in a well-managed block. The key is to look at the largest line items. If cleaning or lift maintenance seems disproportionately high, request the invoices.
Step Three: Request Supporting Documents in Writing
You have the right to request contracts, invoices, insurance policies, fire risk assessments, and historic records going back six years. Send your request by email or recorded delivery so you have a paper trail. The landlord must respond promptly. If they refuse, note that you can take the issue to tribunal. For buildings with four or more dwellings, the annual statement of accounts must be certified by a qualified accountant — ask to see that certification.
Step Four: Check Insurance Commission Disclosure
Under LAFRA 2024, landlords must disclose any commission or payment they receive from building insurance policies. If they have not disclosed it, they cannot recover the insurance premium through the service charge. Ask your landlord for a written statement of any insurance commission received. If they refuse, you may have grounds to withhold that portion of the charge.
Step Five: Consider Professional Advice Before a Dispute
If you have gone through steps one through four and still believe you are being overcharged, the next step is to seek professional advice. A tenant landlord lawyer can review your documents and advise on whether a tribunal challenge is worthwhile. The cost of a consultation is often far less than the amount at stake. And remember — under the new rules, you are no longer automatically liable for the landlord’s legal costs if you lose.
For a broader view of how these rules interact with other aspects of property management, our guide on repurposing commercial spaces covers the regulatory landscape for mixed-use buildings where service charges can become especially complex.
Frequently Asked Questions
Can I refuse to pay a service charge demand that doesn’t follow the new format? ▾
What happens if my landlord doesn’t provide certified accounts within six months? ▾
Does the 18-month rule apply to all service charge costs? ▾
Can I be charged for the landlord’s legal fees if I lose a tribunal case? ▾
What counts as “promptly” when I request documents from my landlord? ▾
Are there different rules for service charges in Wales? ▾
If this was useful, you might also want to read essential tips for renting urban street retail space.
Sources and Further Reading
Understanding chain store lease agreements in the UK — A useful companion piece if you are comparing service charge structures across multiple properties or tenants.
TPI Service Charge Index 2026 Report. The Property Institute, 2026.
New rules for service charge accounting. Cox Hinkins, 2025.
The new rules regarding service charge transparency. Urpad Property Management, 2025.
