The Property Institute (TPI), has published its 2026 Service Charge Index, drawing on data from 13 managing agents – including FirstPort – to analyse trends in service charges across the UK since 2024. The report covers more than 117,000 leasehold homes across England, Scotland and Wales, offering a valuable overview of the evolving operating environment in which we operate.
TPI’s findings reveal that annual service charge bills have increased by 5.8% since 2024, sitting at slightly below inflation, which has risen by 6.1% over the same period. However, this headline figure varies depending on building type and complexity. Leaseholders in buildings over 18 metres paying an average of £4,447 a year, compared with £2,418 in low-rise buildings, and costs rising further in older developments.
These differences reflect a combination of underlying cost pressures, including increased budgeting for reserve funds and the additional costs associated with new industry legislation, such as the Building Safety Act 2022.
According to the report, reserve funds have increased by 26% over the course of the previous two years. These now account for around a sixth (16.4%) of total budgeted spend in 2026. This is welcome news for leaseholders, offering greater protection against unexpected expenses or large-scale works.
An additional significant contributor to leaseholders’ service charges are the costs associated with building safety compliance. Since 2025, costs associated with the Building Safety Act have risen by 53%.
Mairead McErlean, Head of Compliance and Regulatory Affairs at Firstport, comments:
“TPI’s findings highlight the complexity of managing residential buildings and the wide variation in service charge costs across the sector. Factors such as a building’s size, height, age and specification all play a significant role, meaning there is no single benchmark that reflects the experience of every leaseholder.
“Property managers are working within an evolving regulatory environment, particularly for higher-risk buildings, where there are additional safety requirements.
Carrying out behind-the-scenes measures, from fire and building safety assessments to inspections and reporting, are essential to maintaining safe and compliant buildings – but with the consequence of increased costs for leaseholders.”
Mairead concludes:
“While service charge increases are never welcome, many of the rising costs reflect necessary investment in building safety, maintenance and long-term planning. This means that the right people, systems and processes must be in place to support effective management.
“We welcome TPI’s continued call for mandatory regulation of property managers, which has the potential to support consistent standards across the sector and provide greater confidence for residents. Government consulted on this last year, and further clarity on next steps would be welcomed.”
The full Service Charge Index 2026 can be read via the TPI website.
