If you rent a flat or an office in the UK, the service charge is probably one of your biggest annual costs after the rent itself. According to the latest TPI Service Charge Index, the average leaseholder now pays £2,880 per year in service charges. That figure is based on data from over 117,000 homes, so it’s not a niche problem — it’s the reality for millions of people. What that number doesn’t tell you is how much it can vary, or whether you’re being charged fairly in the first place.
I’ve been writing about property costs in the UK for a while now, and the question I hear most often isn’t “how much should I pay?” — it’s “how do I know if I’m being overcharged?” That’s where service charge benchmarking comes in. It’s the tool that lets you compare what you’re paying against similar properties, and it’s surprisingly underused. Here’s what you actually need to know.
If you’re renting commercial space, the rules are shifting too. The updated RICS professional standard for service charges in commercial property came into force at the end of 2025, and it changes what landlords can and can’t recover. I’ll walk you through how to use benchmarking to protect yourself, and where to look for the key details in your service charge agreement.
What Service Charge Benchmarking Actually Tells You
The most important thing to understand is that benchmarking isn’t about finding a single “right” number. It’s about identifying whether your costs fall within a reasonable range for a building like yours. The TPI data shows that the gap between the cheapest and most expensive buildings is enormous — from £1,525 to £8,680. If you’re in a modern low-rise block paying £5,000, that’s a red flag. If you’re in a high-rise building from the 1960s paying the same amount, it might be perfectly normal.
What I’d do first is find out your building’s height and age. The TPI Index breaks costs down by both. Buildings under 11m average £2,418, while those over 18m average £4,447. Age is just as stark: buildings under 25 years old average £2,508, but those over 50 years old average £5,208. If your building is both tall and old, you’re in the highest-cost category by default — but that doesn’t mean every cost is justified.
Why the New RICS Standard Changes Everything for Commercial Tenants
If you’re renting commercial or mixed-use space, the updated RICS professional standard that took effect on 31 December 2025 is the biggest shift in service charge governance in nearly a decade. It doesn’t override your lease, but it sets a benchmark for what’s considered reasonable. And it explicitly bans landlords from recovering certain costs through the service charge.
Here’s what can no longer be passed on: landlord investment costs, void property costs, initial capital costs, future redevelopment costs, and negligence-related costs. That last one is particularly important — if a landlord’s poor maintenance leads to higher costs, they can’t bill you for it. Management fees also can’t be a percentage of the total charge anymore; they must be fixed at the start of the year.
Let me give you a scenario. Say you’re in a multi-let office building and your landlord includes a line item for “asset management” or “rent collection” in the service charge. Under the new standard, that’s not recoverable. If you see “marketing costs for empty units” or “rates on void space,” those are also out. The lease still governs, but the standard is increasingly treated as the benchmark for what’s reasonable. If your landlord tries to include these, you have a strong argument to push back.
What I notice is that many tenants don’t realise they can ask for a breakdown. The new standard requires landlords to provide an apportionment matrix showing how costs are split between occupiers. If you’re not getting that, you’re entitled to ask. For residential tenants, the same principle applies — request a full budget breakdown and compare it against the TPI data. A good service charge management strategy starts with knowing what you’re actually paying for.
Where People Get Tripped Up on Service Charges
Most of the mistakes I see come down to the same few things. Here are the ones that cost tenants the most money.
Assuming the Budget Is the Final Cost
Landlords issue a budget at the start of the service charge year, but the actual costs can be very different. The TPI data shows that the 2024 and 2025 figures in the Index reflect final costs, while the 2026 data is based on budgets and projections. That gap matters. If your landlord budgets £3,000 but the actual spend is £3,500, you’ll get a reconciliation bill — and you’ll have to pay it. The new RICS standard requires budgets to be issued at least one month before the year starts, and reconciliations within four months of the year ending. If those deadlines are missed, ask why.
Ignoring the Impact of Building Height and Age
I’ve spoken to tenants in modern low-rise blocks who were panicking about a £3,000 charge, not realising that’s actually above average for their building type. Meanwhile, tenants in older high-rises were paying £5,000 and assuming it was normal — when in fact it might be inflated. The TPI data gives you a direct comparison: buildings under 11m average £2,418, while those over 18m average £4,447. If your building is under 11m and you’re paying £3,500, you’re above the 75th percentile. That’s worth questioning.
Not Checking What’s Recoverable Under the New Standard
For commercial tenants, the biggest trap is paying for costs that the RICS standard says shouldn’t be recovered. Void costs, investment costs, and negligence-related expenses are the main ones. But the standard also says that ESG expenditure can only be included if it’s a genuine service — everything else must be funded by the landlord. If your service charge includes “sustainability initiatives” or “green improvements,” check whether those are capital improvements. If they are, they shouldn’t be in your bill.
If you’re unsure whether a specific cost is recoverable, it’s worth getting a professional opinion. A tenant landlord lawyer can review your lease and the service charge breakdown to identify anything that shouldn’t be there. It’s a one-off cost that can save you hundreds or thousands over the term of your lease.
Overlooking Reserve Fund Contributions
Reserve funds saw the second-highest year-on-year growth at 26%, according to the TPI data. These are contributions set aside for major future works — new roofs, lifts, cladding repairs. The problem is that some landlords use reserve funds as a slush fund, collecting more than they need. Under the new RICS standard, any money held for service charges yet to be incurred must be held in discrete or virtual accounts, with interest credited back to the service charge. If you’re contributing to a reserve fund, ask to see the account statement. If the landlord can’t produce one, that’s a red flag.
→ Scroll right to see all columns
| Building Height | Average Service Charge | Key Consideration |
|---|---|---|
| Under 11m | £2,418 | Lowest cost bracket; any charge above £3,000 warrants scrutiny |
| 11–18m | £3,507 | Mid-range; Building Safety Act costs may apply |
| Over 18m | £4,447 | Highest cost bracket; expect significant safety compliance costs |
For residential tenants, the same principle applies. If your building is over 18m, you’re in the highest-cost category, and you should expect to see line items for fire safety assessments, cladding remediation, and building safety compliance. The TPI data shows these costs grew 53% year-on-year, so they’re not going away. Make sure they’re itemised separately so you can see what you’re paying for.
How to Benchmark Your Service Charge Like a Pro
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Here’s the practical process I’d follow if I were in your position. It doesn’t require any special software — just the data that’s already available and a bit of patience.
Step 1: Gather Your Building’s Key Details
You need three things: the building’s height (in metres), its age (year built or approximate decade), and your total annual service charge. If you don’t know the height, check the building’s EPC certificate or ask the managing agent. For age, your lease or the Land Registry title will have the construction date. Once you have those, you can compare against the TPI averages: under 11m (£2,418), 11–18m (£3,507), over 18m (£4,447). If your charge is more than 20% above the average for your height bracket, start asking questions.
Step 2: Request a Full Budget Breakdown
Under the new RICS standard, landlords must provide an apportionment matrix showing how costs are split. Even if you’re in a residential building, you’re entitled to a detailed breakdown. Ask for it in writing. Look for the categories that grew fastest in the TPI data: Building Safety Act compliance (up 53%) and reserve funds (up 26%). If those aren’t itemised separately, the landlord may be lumping them into general costs to avoid scrutiny. A commercial property rental checklist can help you track what to ask for at each stage.
Step 3: Check for Non-Recoverable Costs
For commercial tenants, this is where the new RICS standard gives you real leverage. Go through the budget line by line and flag anything that looks like an investment cost, void cost, capital improvement, or negligence-related expense. If you see “asset management,” “rent collection,” “marketing of empty units,” or “rates on void space,” those are non-recoverable under the standard. The lease still governs, but the standard is increasingly used as evidence of what’s reasonable. If the landlord pushes back, you have grounds for a dispute — and the standard recommends Alternative Dispute Resolution before court action.
Step 4: Compare Against the TPI Data Annually
Service charges change every year. The TPI Index is updated annually, so make a habit of checking the latest figures when you receive your budget. If your charge increased by more than the average 5.8% over two years, ask why. Inflation was 6.1% over the same period, so increases broadly tracking inflation are normal. Anything significantly above that needs an explanation. If the landlord can’t provide one, you may be overpaying.
- 1Find your building’s height and ageCheck the EPC certificate or lease for height; Land Registry for construction date. Compare against TPI averages for your bracket.
- 2Request a detailed budget breakdownAsk for an apportionment matrix and itemised costs. Look for Building Safety Act and reserve fund line items.
- 3Flag non-recoverable costsReview against the RICS standard — investment costs, void costs, capital improvements, and negligence costs should not be in your bill.
- 4Compare annually against the TPI IndexCheck your increase against the 5.8% two-year average. Anything significantly above needs a written explanation.
What I’d do in your position is set a calendar reminder for when your service charge budget is due — usually one month before the service charge year starts. When it arrives, run through these four steps before you pay. If something doesn’t add up, don’t just accept it. Ask for clarification in writing. The new RICS standard gives you more rights than most tenants realise, and the TPI data gives you the evidence to back up your questions.
Frequently Asked Questions
Can I challenge a service charge that seems too high? ▾
Does the new RICS standard apply to residential properties? ▾
What if my landlord refuses to provide a budget breakdown? ▾
How do I find out my building’s height for benchmarking? ▾
Are service charges capped by law in the UK? ▾
Service charge benchmarking isn’t complicated, but it does require you to ask the right questions. Start with your building’s height and age, compare against the TPI averages, and check every line item against the new RICS standard if you’re in commercial property. The data is on your side — you just have to use it.
If this was useful, you might also want to read The Landlord-Tenant Relationship: Building Bridges, Not Burning Them in the UK.
Sources and Further Reading
Smart Tips for Renting Airport Retail Lease Spaces — Practical advice for tenants in specialised commercial settings where service charges can be unusually high.
TPI Service Charge Index 2026 Report. The Property Institute, 2026.
The New RICS Service Charge Standard: What It Is and Changes for 2026. Stevens & Bolton LLP, 2026.
SCOR for Offices: Service Charge Operating Report. Bellrock, 2025.
