Ringley Warns: 2020 Minimum Wage Increase May Lead to Higher Service Charges for Tenants

According to property management business Ringley, the national minimum wage (NMW) increase for 2020, from £8.21 to £8.72 for employees over 25, could result in higher service charges for tenants. Following the pay rise of 6.2%, the highest since the introduction of the NMW in 1999, is needed, Ringley warns that property managers will likely raise service charges to cover the extra expense.

COVID-19 Crisis: Navigating Cashflow Challenges and Service Charge Adjustments in Property Management

This issue may be exacerbated due to cashflow worries for property management businesses caused by the COVID-19 crisis, which is, in turn, already affecting the financial confidence of tenants. Ringley warned that these changes to service charges could be introduced as early as this month.

Understanding the Consequences of Minimum Wage Hike on Service Charges for Leaseholders

Mary-Anne Bowring, group managing director at Ringley, said: No one doubts that Brits deserve a much-needed pay rise, and the hike to the national minimum wage will be welcome news for many. “However, we should be mindful of the impact this will have…on the 2.9m leaseholders and many businesses in these uncertain times. “The increase in the national minimum wage will most likely have a knock-on effect on service charges payable by leaseholders. “We are making all of our customers aware of where service charges will increase in line with the national minimum wage hike.