Additional Fire Door Safety Measures for High Rise Flats

According to recent research conducted by a leading lettings agency, the average service charges for flats in England and Wales have witnessed a substantial increase of 51.7 percent since 2018. The cost surge primarily stems from implementing additional fire safety measures.

As a result, leaseholders may have to pay a staggering 7.6 billion in service charges throughout 2023.

At 24 percent, service charges in London surpass those in any other region in the country. These charges are above the average for England and Wales. According to recent findings, approximately half of the flats in England and Wales are located within buildings consisting of 20 units or more. In larger developments, the average annual service charges amount to 2,606 per flat, almost 99 percent higher than blocks with five units or fewer. This is attributed to the more intricate nature of managing and maintaining such complex structures, along with all the sophisticated plants within. Additional amenities and services, like gyms, concierge services, and communal grounds, also contribute to the higher service charges.

As of mid-2023, the average annual service charge for flats across England and Wales reached 1,431. It equals a monthly rate of 119. This calculation covers all apartments where a monthly service charge is applicable but excludes houses where a service charge is paid and a few flats where no formal service charge is imposed. Since 2018, there has been an increase of 51.7 percent in service charges for flats in England and Wales. This is extraordinary as it marks the first time since then that the average annual service charge has exceeded 1,000 per year. A large portion of this increase, around 37 percent, occurred between 2018 and 2019. This spike is mainly attributed to the implementation of various fire safety measures following the tragic Grenfell Tower incident in June 2017.

In the past 12 months, the average service charge has witnessed a modest rise of 8.0 percent, which aligns with overall inflation trends. It is interesting to observe that smaller blocks and converted houses generally tend to have lower service charges. The average annual service charge is 1,309 in blocks comprising fewer than five flats. This is primarily because of limited communal spaces or grounds and residents bearing a higher proportion of maintenance responsibilities themselves. According to analysts, there has been some relief for leaseholders in recent years, as service charge increases have been in line with inflation. Yet 2023 is likely to be the worst year yet for high-rise blocks and here is why.

The Fire Safety Act 2023 mandates inspections of fire doors quarterly and residents' apartment doors annually. Undoubtedly, most blocks are finding a backlog of work that needs to be carried out. The Building Safety Act requires registration of high-rise buildings with The Building Safety Regulator by October 2023. Not only does registration come with a cost, but so does preparing the information.

The EWS1 Form has to be renewed every 5 years.

The EWS1 Form has to be renewed every 5 years.

Blocks with a poor EWS1 rating often require a PAS9980 assessment to evaluate to what extent materials can be managed in situ. Many blocks are now instructing type 2 compartmentation surveys (to check if compartmentation from flats to the communal areas) is up to scratch, and/or to prepare for claims under The Building Safety Act 2023 which has extended the limitation period for all fire safety defects. Where Type 4 compartmentation surveys reveal concerns; many blocks are now instructing Type 4 compartmentation survey (to check the compartmentation flat to flat) similarly to prepare for developer claims.

Insurance premiums have risen significantly in high-rise buildings.

Insurance premiums have risen significantly in high-rise buildings.

Many contractors and suppliers to the service charge have put their prices up by soaring rates to match inflation. The rising costs of building materials and insurance have lately impacted leaseholder premiums. Construction products entailing high energy usage and those containing microchips continue to experience double-digit price hikes.

While there has been some decline in the cost of certain building materials and energy in recent months from 2022 highs, residents will not enjoy its benefits immediately as commercial contracts for communal utilities are exempt from price caps. Many freeholders have already entered fixed commercial agreements at higher prices.

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