Recent news coverage on the BBC has once again brought the issue of rising service charges into the spotlight, with many leaseholders understandably frustrated by increasing costs and feeling they have little control over the management of their buildings.
Whilst there is no doubt that many residents have experienced poor service and unexpected increases, it’s important to separate two very different issues: the legal structure of a building and the quality of its management.
There is no escaping the fact that the cost of maintaining residential buildings has increased significantly in recent years.
Insurance premiums have risen sharply, utility costs remain high, labour and materials continue to cost more than they did just a few years ago, and new health and safety legislation has introduced additional compliance requirements for many developments.
These are genuine costs that every managing agent has to deal with.
However, that doesn’t mean every increase in service charges is unavoidable.
One of the biggest factors affecting service charge budgets is the approach taken by the managing agent.
A proactive managing agent should be constantly looking for opportunities to deliver better value for leaseholders by:
· Regularly tendering maintenance contracts to ensure competitive pricing.
· Using reliable local contractors where appropriate, rather than automatically relying on expensive national suppliers.
· Challenging quotations and ensuring works are genuinely necessary.
· Planning preventative maintenance to avoid more costly repairs later.
· Producing realistic budgets with clear communication about where residents’ money is being spent.
In our experience, these simple principles can make a significant difference to both costs and the standard of service residents receive.
One point that is sometimes overlooked in the wider debate is that leaseholders already have statutory rights to take greater control over the management of their building.
The Right to Manage allows qualifying leaseholders to take over the management of their development without having to prove that the existing managing agent has done anything wrong.
For many developments, this can be an excellent way of giving residents greater influence over how their building is managed while still appointing a professional managing agent to deal with the day-to-day responsibilities.
Professional management and resident control are not mutually exclusive… they often work best together.
Since establishing Love Your Estate, we’ve seen first-hand how a fresh, proactive approach can benefit developments.
In one recent example, we reviewed the outgoing managing agent’s proposed budget and identified savings of more than £20,000 for the first year. Importantly, those savings were achieved while improving the quality of maintenance, communication and overall management—not by cutting corners or reducing essential services.
That isn’t because costs have somehow disappeared. It’s because careful procurement, sensible budgeting and proactive management can have a substantial impact.
The cheapest service charge is not always the best outcome for residents.
Equally, the highest service charge doesn’t necessarily mean a building is being well managed.
Good property management is about ensuring every pound collected from leaseholders is spent wisely, transparently and in the long-term interests of the development.
As the debate around leasehold reform continues, one thing remains clear: regardless of the ownership structure, residents deserve professional, accountable and proactive management that delivers genuine value for money.
At Love Your Estate, that’s exactly what we aim to provide every day.