The Property Institute Service Charge Index 2026: How Olympus Is Controlling Cost Increases

Service charges are rarely far from the conversation in residential property management. Leaseholders understandably want to know why costs are changing, while RMC, RTM and Freehold Directors need confidence that budgets are reasonable, properly scrutinised and sufficient to look after the building for the long term.

The Property Institute Service Charge Index 2026 provides some useful evidence.

The Property Institute (TPI) is the leading professional body for residential property management, representing around 7,500 property managers and more than 380 managing agent and factoring firms whose members collectively manage around two million homes.

For its 2026 Index, TPI analysed service charge information from 2,137 residential estates covering 117,052 homes. The dataset includes actual expenditure for 2024 and 2025, together with budgeted costs for 2026.

The headline finding is interesting: average service charges increased by 5.8% between 2024 and 2026, slightly below CPI inflation of 6.1% over the same period.

We have compared those figures with our own portfolio. Across Olympus-managed developments, the average service charge increased by 5.4% on the same like-for-like basis.

That is below both the TPI average and inflation. But the overall percentage only tells part of the story.

What does the average service charge look like in 2026?

TPI puts the average 2026 service charge budget at £2,880 per leaseholder.

There is, however, enormous variation between buildings. At the 10th percentile the average is £1,525, while at the 90th percentile it reaches £8,680.

That helps illustrate why comparisons between individual developments need to be treated carefully. The facilities provided, age and condition of the building, staffing arrangements, insurance requirements and future maintenance needs can all affect the figure considerably.

According to TPI, building height is the single strongest predictor of service charge levels in its dataset:

• Buildings under 11 metres average £2,418 per leaseholder.
• Buildings between 11 and 18 metres average £3,507.
• Buildings over 18 metres average £4,447.

Age has a similarly significant effect. Buildings under 25 years old average £2,508 per leaseholder, compared with £5,208 for buildings more than 50 years old.

TPI identifies reserve funding and buildings insurance as major reasons for the additional cost associated with older buildings. Put simply, older and more complex buildings generally require more money to maintain properly.

This is particularly relevant when comparing property management companies London wide. A managing agent overseeing older mansion blocks, large staffed developments or Higher-Risk Buildings will inevitably encounter a different cost profile from one managing predominantly smaller or newer developments.

Where are service charge costs actually going?

The TPI analysis gives a useful breakdown of the main areas of expenditure.

Repairs and maintenance remain the largest category, representing 20.4% of the average 2026 budget. Reserve fund contributions have become the second largest at 16.4%, followed by buildings insurance at 13.3%.

The direction of travel within those categories is perhaps more revealing:

• Repairs and maintenance: down 3% between 2024 and 2026.
• Reserve fund contributions: up 26%.
• Buildings insurance: down 4% over the two-year period.
• On-site staff: up 11%.
• Utilities: down 7%.
• Management fees: up 2%.
• Building Safety Act compliance: up 53%, although still only 1.5% of the overall 2026 service charge budget.

The figures reinforce an important point for anyone involved in block management in London: there is no single cause of a service charge increase.

Some costs are falling. Others are increasing because of wages, regulatory obligations or the needs of ageing buildings. Understanding the individual lines is far more useful than looking at the headline bill alone.

How does Olympus compare?

We carried out the same 2024 to 2026 comparison across the Olympus portfolio, using actual 2024 expenditure and 2026 budgets so that the figures are comparable with TPI’s methodology.

Overall, Olympus service charges increased by 5.4%, compared with 5.8% across the TPI dataset and 6.1% CPI inflation.

Within that overall result, several categories stand out.

Utilities: down 17.7%

TPI reports a 7% fall in utility costs as energy markets have normalised following the extreme pressures seen earlier in the decade.

Across the Olympus portfolio, utility costs have fallen by 17.7% between 2024 and the 2026 budgets.

This is substantially ahead of the wider TPI trend and is one of the clearest areas where the portfolio has experienced meaningful cost reduction.

Utility expenditure can be significant in developments with communal heating, lighting, lifts and other shared facilities. Keeping contracts and consumption under review therefore remains an important part of controlling the overall service charge.

Repairs and maintenance: down 6%

Repairs and maintenance remain the biggest single expenditure category nationally, but TPI’s figures show the category falling by 3% since 2024.

At Olympus, general repairs and maintenance expenditure has fallen by 6%.

That matters because maintenance is one of the areas where active London property management services can influence outcomes. Regular site inspections, good contractor management and dealing with emerging problems promptly all help buildings operate more efficiently.

Reducing expenditure, however, cannot come at the expense of necessary maintenance. Delaying work simply to keep today’s budget down can result in a more expensive problem later.

Buildings insurance: down 3.3%

There is some welcome news in TPI’s insurance figures too. After the severe premium increases experienced across the residential sector following Grenfell, buildings insurance costs were broadly flat during 2026 and are 4% lower than in 2024.

Olympus’s portfolio has seen a similar movement, with insurance expenditure falling by 3.3% over the period.

The slightly smaller reduction needs to be viewed in context. Olympus operates in London and manages a number of taller and Higher-Risk Buildings, where insurance remains particularly challenging. TPI itself notes that pressures continue to be greater for higher-rise buildings.

Management fees make up 6.3% of Olympus service charges

One figure that is particularly interesting is the proportion of the service charge represented by the managing agent’s fee.

Across TPI’s 2026 dataset, management fees account for around 12.6% of total service charge expenditure. Across the Olympus portfolio, the equivalent figure is 6.3%.

This is a portfolio-level comparison rather than a suggestion that two individual buildings can be compared purely by percentage. The composition of every service charge budget is different.

It does, however, provide useful perspective. Half of the national proportion is represented by Olympus management fees within our portfolio, while the great majority of the service charge is being spent directly on operating, maintaining, insuring, staffing and planning for the buildings themselves.

TPI also found that management fees increased by only 2% between 2024 and 2026. That compares with a 4.1% increase in earnings across real estate activities and a 5.5% increase in chartered surveyor salaries cited in the report.

For directors considering different block management companies London has to offer, the management fee therefore needs to be understood in the context of the much larger budget the agent is responsible for overseeing.

Why some costs should increase

Perhaps the most important lesson in the TPI figures is that good service charge management cannot be judged by whether every individual category has fallen.

There are areas where Olympus is deliberately spending more.

Two in particular are worth explaining.

Building safety and compliance

Olympus’s health and safety expenditure has increased by 45% between 2024 and the 2026 budget.

We view safety and compliance as areas where appropriate expenditure needs to be prioritised. The regulatory environment has changed considerably, building safety expectations have increased and the evidence required to demonstrate good management is more extensive than it once was.

TPI’s national figures illustrate the same wider pressure. It records general health and safety and Building Safety Act compliance as separate categories, with Building Safety Act compliance expenditure having increased significantly since 2024.

Our approach is reflected in the resources we put behind compliance, including dedicated compliance expertise within Olympus, as well as the work undertaken at individual developments.

One recent example is an 18-storey, 422-unit Higher-Risk Building in Elephant & Castle, where Olympus led much of the work required for the building to successfully secure its Building Assessment Certificate from the Building Safety Regulator.

You can read about the 21-month process in our article on achieving a Building Assessment Certificate from the Building Safety Regulator.

Reserve funds: up 33.8%

Olympus’s reserve fund contributions have risen by 33.8% between 2024 and 2026, compared with a 26% increase in the TPI dataset.

On the surface, this is one area where Olympus costs have risen faster than the national benchmark. The reason gets to the heart of how we believe buildings should be managed.

Reserve funds exist to help pay for major future expenditure such as roof replacement, lift renewal, external refurbishment and other substantial planned works.

TPI suggests that the national increase may partly reflect buildings addressing historic underfunding. That closely mirrors our own experience.

Olympus has taken on a number of developments where previous reserve fund collections have not been sufficient to meet the major works that can reasonably be anticipated. A low reserve contribution may have kept historic service charges down, but it can leave current and future leaseholders facing a substantial one-off bill when work eventually becomes unavoidable.

Our approach is to put a Capital Expenditure Plan in place for every managed building and use that forward view to inform future funding requirements, subject to the provisions of the lease.

This aligns with the principles of the RICS Service Charge Residential Management Code, 4th edition, which places considerable emphasis on costed long-term planned maintenance and using those plans to inform budgets and reserve fund contributions.

A well-funded reserve does increase today’s service charge contribution. It also reduces the likelihood that directors suddenly discover a major refurbishment is required without the money available to pay for it.

That is proactive management rather than deferred expenditure.

Controlling costs means looking beyond the headline number

The Olympus and TPI figures together paint a useful picture.

Between 2024 and 2026:

• Average TPI service charges increased by 5.8%.
• Average Olympus service charges increased by 5.4%.
• CPI inflation increased by 6.1%.
• Olympus utility costs fell by 17.7%, compared with a 7% TPI reduction.
• Olympus repairs and maintenance expenditure fell by 6%, compared with a 3% TPI reduction.
• Olympus buildings insurance expenditure fell by 3.3%, compared with 4% across TPI’s national dataset.
• Olympus management fees represent 6.3% of service charge expenditure, compared with 12.6% in the TPI dataset.
• Olympus reserve contributions increased by 33.8%, reflecting our focus on properly funding anticipated future works.

For RMC and RTM Directors, these comparisons also demonstrate why challenging a service charge budget should involve more than asking whether the total has increased.

The better questions are: What is driving the change? Has expenditure been challenged? Are contracts being reviewed? Is sufficient money being set aside for future works? Are safety and compliance obligations properly funded? And can the managing agent explain clearly where the money is going?

Service charges should be reasonable, transparent and properly accounted for

There is one final point that is sometimes lost in discussions about rising service charges.

A variable service charge is collected to meet the costs permitted under the lease. Service charge monies are held separately and are used to pay for the services, maintenance, repairs, insurance, staffing, professional costs and other expenditure required to manage the development.

The lease determines what can be recovered and how the costs are apportioned. Service charge costs must also be reasonable in law and can be challenged by leaseholders through the First-tier Tribunal.

Any year-end surplus is accounted back to leaseholders rather than becoming additional profit for the managing agent, RMC or landlord.

For us, therefore, controlling service charges means making sure money is spent well: reducing costs where opportunities genuinely exist, scrutinising expenditure carefully and being equally prepared to recommend appropriate investment where a building’s safety, condition or long-term financial health requires it.

If you are an RMC, RTM or Freehold Director reviewing the cost and performance of your current managing agent, talk to the Olympus Management team about how we could manage your building.