Leasehold and ground rent estimator

Ground rent is a payment to the freeholder for the land the building sits on, often a small fixed sum. The service charge is separate and much larger, covering the upkeep of the building: cleaning, insurance, repairs and any managing agent. Both are set out in your lease.

It varies widely, from a few hundred pounds a year for a small block to several thousand for a flat with a lift, concierge or communal grounds. In this example a £1,800 service charge plus £350 ground rent works out at £192 a month once other lease costs are added.

Yes. Ground rent on most new residential leases has already been reduced to a peppercorn, effectively zero, and the government has said it intends to tackle existing ground rents too. Reform is still moving through Parliament, so the position for existing leases is not settled. Treat any figure here as the current cost, not a guaranteed future one.

Yes, and it often does. Service charges reflect the actual cost of running the building, so a major repair such as a new roof or works to the exterior can push them up sharply for a period. You have a right to be consulted on large works and to challenge charges you think are unreasonable at the tribunal.

It depends on the lease and the managing agent. Many charge annually or in two half-yearly instalments rather than monthly. The monthly figure here is the annual total divided by twelve, which is useful for budgeting even when the actual bill arrives less often.

Ground rent, service charge and any other lease costs are each added up for the year, then divided by twelve for a monthly figure. In this example £350 of ground rent and £1,800 of service charge, plus £150 of other costs, give a yearly total of £2,300 and a monthly figure of £192. Entering figures from an actual lease and service-charge statement gives a more accurate total.

A mortgage calculator only covers the loan repayment, but a leasehold flat also carries ground rent and a service charge that a freehold house does not. The service charge in particular can move the monthly budget noticeably, since it funds building repairs and communal costs that vary year to year. Adding these figures to the mortgage gives a more complete monthly cost for the property.

A flat with £350 ground rent, a £1,800 service charge and £150 of other lease costs comes to £2,300 a year, or £192 a month on top of the mortgage. Over a five-year fixed mortgage term that is more than £11,500 before any increases in the service charge, which is why checking recent service-charge statements before buying is worthwhile.