Service charges and ground rent for leasehold buy-to-lets
Leasehold flats carry ongoing service charge and ground rent costs that reduce net yield and can affect the mortgage and letting process.
5 min read · Updated 2 August 2026
Overview
Leasehold flats carry ongoing service charge and ground rent costs that reduce net yield and can affect the mortgage and letting process.
Budgeting for service charges
Ask for at least three years of service charge accounts to understand typical costs and any planned major works.
Ground rent and lease length
Check the ground rent review terms and remaining lease length, since a short lease can affect mortgageability and value.
Section 20 major works
Leaseholders can be billed significant sums for major works with limited notice; factor this risk into cash flow planning.
Superior lease restrictions
Some leases restrict subletting or require the freeholder's consent, so check this before agreeing to let the flat.
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This guide is general information for UK landlords and letting agents, not legal advice. Rules differ across England, Wales, Scotland and Northern Ireland — check your local requirements or take advice before acting.