Research carried out by Direct Line for Business found that property service charges have jumped substantially, with a third of management companies increasing fees in the past two years.
The service charge and ground rent together mean that a 40% taxpayer purchasing the average flat has to earn £5,200 a year just to maintain the property.
It is not just leaseholders who are having to stump up every year for service charges. Recently, developers have begun demanding that freehold buyers also pay service charges for the upkeep of roads and gardens.
More and more leaseholders are now seeking to set up a Right to Manage Company which was introduced through the Commonhold and Leasehold Reform Act 2002. It gives leaseholders the statutory right to take over the management of their property from the landlord. Right to Manage is important for leaseholders, should they wish to exercise such right.
Buyers of apartments in new-build towers not only have to pay sky-high prices but also face soaring annual service charges that now average £2,777 a year, according to new research.