Service charges on London new-build apartments: what they cover and what's typical

How service charges are calculated, what they pay for, typical London ranges per square foot, and the questions to ask before you buy.

By OpenHouse advisors · Updated 18 September 2026

What a service charge is

A service charge is your share of the cost of running and maintaining the building and estate — it is separate from your mortgage and from ground rent. On new leases it is usually calculated per square foot of your apartment, so a larger home pays proportionally more. It is billed annually or half-yearly by the managing agent on behalf of the freeholder or residents' management company.

What it pays for

  • Building insurance, cleaning and lighting of communal areas, lifts and their maintenance.
  • Concierge or security staffing where provided — the biggest single cost in many London schemes.
  • Amenities: gym, pool, spa, cinema room, residents' lounge, co-working space, roof terraces and landscaping.
  • Estate management, fire safety systems, waste, and a sinking (reserve) fund for future major works such as roofs and lifts.

What's typical in London

Charges vary enormously with the level of amenity. A simple block without a concierge might sit in the low single figures per square foot per year; a full-service tower with 24-hour concierge, pool and gym can be several times that. As a rule, the more the building offers, the higher the charge — and buyers should price that against the rent premium or lifestyle value it delivers. OpenHouse shows the service charge per square foot on every development page so you can compare like for like.

Questions to ask before you reserve

  • What is the estimated charge per square foot, and is it based on a full-year budget for the completed estate?
  • Is there a sinking fund, and how is it funded?
  • Who is the managing agent, and can leaseholders change them?
  • Are any costs (e.g. estate-wide landscaping) charged separately as an estate charge?
  • How have charges moved on the developer's earlier phases or comparable schemes?

Your protections

Service charges must be reasonable and leaseholders can challenge them at the First-tier Tribunal (Property Chamber). Managing agents must consult leaseholders before major works above set thresholds, and you are entitled to a summary of the accounts. Ground rent on leases granted since June 2022 is a peppercorn (effectively zero) under the Leasehold Reform (Ground Rent) Act 2022.

Frequently asked questions

How is a service charge calculated on a new-build?
Usually per square foot of your apartment multiplied by the building's annual budget rate, so a 700 sq ft flat in a building charging £8 per sq ft pays around £5,600 a year. The rate reflects the level of amenity and staffing.
Does the service charge include ground rent?
No. Ground rent is a separate payment to the freeholder, but on new leases granted since June 2022 it is a peppercorn (zero), so in practice you pay only the service charge.
Can service charges go up?
Yes. They are re-budgeted each year and typically rise with staffing, insurance and energy costs. Charges must be reasonable, and leaseholders can challenge unreasonable increases at the property tribunal.
Is a high service charge bad for buy-to-let?
It reduces net yield, but buildings with concierge and amenities often command higher rents and let faster. Compare the charge per square foot against the achievable rent premium rather than judging the figure alone.

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