For thousands of homeowners across the UK, the dream of owning a property is turning into a financial nightmare.
Spiralling service charges, imposed by property management companies, leave many residents feeling trapped as they cannot afford rising fees and also meaning others cannot buy their homes.
What was once an affordable way to get on the property ladder has become an ongoing financial burden, with some leaseholders paying more in service charges than their mortgage repayments.
As frustrations mount, calls for reform and greater transparency in the property management sector are growing louder.
Unexpected bills leave residents struggling
For many flat owners, service charges have increased at an alarming rate, leaving them questioning where their money is going. Ben Murphy, a 29-year-old maths teacher from Newport, was shocked when his service charge bill for 2025 reached £3,379 – an increase of 262% since 2020.
"You talk to your friends about saving for a holiday or a new home, but I'm just trying to save enough to pay my service charge," Murphy said.
Another resident, Dan Willis, revealed that his service charge for 2024 exceeded his annual mortgage payments, forcing him and his wife to borrow money to cover the costs. When they attempted to sell their flat, prospective buyers backed out after learning about the hefty service fees.
Lack of transparency and accountability
A common complaint among affected homeowners is the lack of transparency regarding how service charge funds are allocated.
Murphy expressed frustration at the vague breakdown of expenses, noting that the only communal area inside his building was a small carpeted entrance.
In Cardiff Bay’s Victoria Wharf development, also managed by FirstPort, a major property management company overseeing more than 6,000 residential developments in the UK, residents are attempting to take control by forming a Residents Management Company (RMC). They hope this will lead to better transparency and more reasonable service fees.
The bigger picture: How this affects homeowners nationwide
The issue of rising service charges is not unique to Newport or Cardiff – it’s a widespread problem affecting leaseholders across the UK.
According to research by estate agency Hamptons, the average annual service charge for leaseholders in Wales remained below £2,000 in 2024, but many properties saw significant spikes in fees.
The rising cost of building insurance, partly influenced by the Grenfell tragedy, has contributed to these increases. Residents at Victoria Wharf collectively pay over £500,000 annually for insurance alone, with no input on the decision-making process.
The government has pledged to tackle these issues by banning new leaseholds and increasing protections against exploitative management practices. However, legal experts suggest that more regulation is needed to ensure competitive pricing and transparent financial practices in property management.
For thousands of homeowners, the battle for fair service charges continues, with many seeking alternatives such as resident-led management to regain control over their properties and finances.
