How Rising Service Charges Are Impacting Residential Asset Management – and What Owners and Investors Can Do About It
Richard Lewis, Director of Mixed-Use at SAY, discusses the growing impact of rising service charges on the Mixed-Use sector. With increasing cost pressures, how can we ensure operational efficiency and financial sustainability?
What are the biggest challenges facing asset management at the moment?
“One of the biggest challenges for residential owners and investors is the pressure on operational costs. Service charges are significantly impacting the viability of both new schemes and existing assets. Leaseholders are placing increasing pressure on managing agents and developers to ensure service charges are properly managed. This is not just a compliance risk but also a reputational one. It’s crucial to have a clear process in place to manage costs from the outset of a project and throughout its lifecycle. “
How is the increase in service charges impacting the sector?
“It’s having a major impact on the leasehold sector, as these properties are becoming less desirable purchase options. Service charges are now a key factor in affordability when people choose their next home, so it’s essential that they are managed effectively from the outset to maintain customer confidence. The intense scrutiny on service charges—from both leaseholders and the media—means developers, investors, and property owners must have robust processes in place. This helps protect their financial risk and avoid disputes at the first-tier tribunal while ensuring efficient day-to-day expenditure and asset performance. “
What are the key inefficiencies you see in asset management?
“A recurring issue is the lack of control over cash flows within service charge accounts. Under-budgeting or poor communication can impact the collection of charges, leading to high debt balances. When funds are limited, the day-to-day running of operations is severely affected.
Additionally, increasing regulation under the Building Safety Act has brought greater scrutiny to compliance and general operations. Investors and managers must have full visibility of what’s happening in their buildings to ensure both financial stability and regulatory adherence.”
What sets SAY apart in its approach?
“We are operational experts who understand the challenges from both sides. We recognise the daily frustrations property managers face, but we also align our strategic advice with the needs of owners, investors, and landlords. Our approach ensures that efficiency, cost management, and compliance are balanced with delivering a high-quality service to leaseholders on-site.”
What kind of value can clients see from day one?
“Any landlord developing a leasehold scheme needs to ensure their risk is effectively managed. Our asset management service delivers immediate value by streamlining how schemes are managed post-practical completion. It provides reassurance while also offering hard data, benchmarking, and performance insights to ensure managing agents are operating as they should.”
