Why Do Service Charges Feel So Expensive?

If you’re a leaseholder, you’ve almost certainly asked the question: “Why are our service charges so high?” It’s one of the most common concerns raised and one that often comes down to the services contained within a building and how well the property is maintained.

A frequent misconception is that service charges are income for the managing agent - they are not.  Service charges are ring‑fenced funds collected solely for the running, safety, maintenance and long‑term protection of your building. 

At Burns Hamilton, the income we receive is limited to the management fee clearly set out in the management agreement and agreed with our client. This fee represents only a small percentage of the overall budget. The remainder of the budget is allocated entirely to the services, suppliers, and statutory obligations necessary to manage the building responsibly and effectively.

Your annual service charge budget isn’t put together behind closed doors.  Our Property Managers work closely with our client, usually the Directors of the Resident Management Company to discuss and agree every cost.  Through balancing service requirements with cost, we collectively ensure the building receives good value without compromising essential standards.  We share the budget with leaseholders, with line-by-line itemisation and a description of what each line covers, giving confidence that spending decisions are thoughtful, reasonable and proportionate.

Financial transparency and accountability are key to building trust with your Managing Agent, and it is something which Burns Hamilton do well. Directors receive regular expenditure‑vs‑budget reporting and explanations of any variances.  All leaseholders receive clear, accurate annual accounts prepared in line with industry best practice.  We also have proactive arrears management to ensure the building’s finances stay stable, whilst balancing the individual situations of residents.

A well‑managed service charge isn’t just an annual bill - it is an investment in your building’s future. These funds support the integrity and safety of your building, ensure smooth day‑to‑day operations and maintain the long‑term value of the property.

When service charges are managed transparently and responsibly, owners and residents benefit from a well‑maintain

ed environment and the reassurance that their contributions are being used wisely.

Speak to Burns Hamilton for transparent, accountable management of your property and service charge funds.  We provide Directors and leaseholders with the reporting, expertise and financial confidence they deserve.