New research by landlord insurance provider, Direct Line for Business, has revealed that property service charges are rising rapidly with one-third of management companies increasing these fees in the last two years.

The average service charge or fees leaseholders pay to cover their share of the overall building maintenance, now stands at £1,863. This cost alone represents more than two months of the average monthly rental income received by landlords, which stands at £906. In addition to this, they will also have other costs to think about such as paying tax on these monies, mortgage payments, management and agency fees and any ground rent fees which are now on average £371 a year for a new build and £327 for a property pre-2016. 

The service charges for new build properties, coming on the market in 2016 are significantly greater than for older dwellings at £2,777. This is 96% higher than the average for an older property.

Even within the capital, service charge levels can vary markedly between developments. One new build development coming onto the market in Croydon in 2016 will see home owners paying £1.55 per square foot in service charges, while a development in Lambeth coming onto the market in 2017 is charging four and a half times more at £7 per square foot.