Owning a leasehold flat means paying a service charge for the upkeep of the building, plus ground rent. Enter the figures to see your monthly and annual cost, your share of the total, and how it stacks up against the building's overall budget.
Leasehold flat · 2026
If you own a leasehold flat, the service charge is your share of the cost of running and maintaining the building and its communal areas. Your lease sets out what is covered and what percentage you pay. Typical items include:
| Typical service-charge item | What it covers |
|---|---|
| Buildings insurance | Insuring the whole structure |
| Cleaning & gardening | Communal areas and grounds |
| Lift & lighting | Maintenance and communal energy |
| Management fee | The managing agent's charge |
| Reserve / sinking fund | Saving for big future works |
Charges must be reasonable, and you have the right to see how the money is spent, to be consulted on major works above a threshold, and to challenge unreasonable charges at the First-tier Tribunal. If you are budgeting for a flat purchase, factor the service charge in alongside your mortgage and other costs — see the conveyancing cost calculator, lease extension calculator and mortgage calculator.
A service charge covers your share of the cost of running and maintaining the building — things like cleaning, gardening, buildings insurance, lift maintenance, communal energy and a sinking (reserve) fund. Your share is usually a fixed percentage set in your lease, often based on the number or size of the flats, so you pay that proportion of the total budget.
The service charge pays for the building's running costs and is variable, rising or falling with the actual spend. Ground rent is a separate, usually fixed annual payment to the freeholder for the land the building sits on. Many newer leases have low or peppercorn (zero) ground rent following recent reforms.
Service charges have risen sharply in recent years, driven by higher buildings insurance, energy costs, and in some buildings major works or fire-safety remediation. Your lease usually lets the managing agent recover reasonable costs, and you have the right to challenge unreasonable charges at the First-tier Tribunal.
A sinking or reserve fund is money set aside each year within the service charge to pay for large future works — like a new roof, lift or redecoration — so the cost is spread over time rather than landing as one big bill. Contributions to it are part of your annual service charge.
