June 25, 2025
UK Property Market / Manchester
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What actually is service charge? And other new-build terms explained…
So, you’ve been looking at buying your first home in the city, or maybe it’s time to venture into buy-to-lets, but trying to figure out all these new terms can be confusing. We speak to new build buyers every day, no matter how many viewings they’ve been on or how many brochures they’ve flicked through, the same questions come up time and time again. So we’re here to answer them.
What is service charge?
Service charge is a fee you pay for the upkeep and maintenance of the development. This can include:
- Cleaning and tidying of communal areas
- Maintenance of amenities, (e.g. lifts, gym, car park, co-working areas)
- Concierge or security staff
- Garden maintenance
- General building repairs and insurance
The cost is usually calculated per square foot of your property, so if you have a smaller property, you’ll pay less, and if it’s a larger property, you’ll pay slightly more. It’s typically billed annually or bi-annually, but often paid in monthly instalments.
💡 Top Tip:
Always ask your agent for a breakdown of what’s included. Service charges can vary a lot depending on location, amenities, and developer.
Is ground rent still a thing?
Typically, no. Recent legislation means that most new leasehold properties will have ground rent of £0 or ‘Peppercorn’ – meaning a symbolic annual rent (literally one peppercorn), though it’s not expected that anyone will actually ask for it.
However, if you’re buying a resale apartment that completed any time prior to 2022, it’s worth checking if any ground rent still applies.
What is leasehold?
If you’re buying an apartment in the UK, especially a new build, chances are it’ll be leasehold. But what does that actually mean?
In simple terms, leasehold means you own the property, but not the land it sits on. You’ve got the right to live in it (or rent it out) for a set number of years – usually 125, 250 or even 999 years, depending on the lease. Most new builds these days are sold with long leases (250+ years), as a short lease can impact resale value and mortgagability.
The land, building and communal areas? Those are owned by the freeholder, who’s responsible for things like maintenance, insurance, and general upkeep. In return, leaseholders pay service charges.
Are there any hidden fees I should know about?
There shouldn’t be, but it’s good to go in with eyes wide open. Beyond your mortgage and deposit, factor in:
- Reservation fee (typically £500–£2,000 for off-plan)
- Legal fees (around £1,000–£1,500+VAT)
- Stamp Duty (if applicable)
- Furniture packs (if buying for investment)
Your agent or solicitor should lay all this out clearly, but don’t be afraid to ask, just to be double sure.
How long does the whole process take?
For completed units, you can often exchange and complete within a couple of months. For off-plan? It depends on the build stage. If you’re buying early – say, two years before completion – you might exchange contracts with a 10-25% deposit, then sit back and wait for the build to finish.
Some buyers use that time to save, plan interiors, or sort their rental strategy.
Final thoughts
New build homes, especially off-plan ones, can feel like a different world if you’ve never bought one before. But once you understand the basics of service charges, leaseholds and build timelines, it all starts to click into place.
And that’s where a good agent comes in. At Orlando Reid Invest, we’re here to make the process as smooth (and jargon-free) as possible – whether you’re buying to live, rent out, or something in between.
Got questions we didn’t cover here? Drop us a message – we love a good property chat.
