A London office service charge is the sum a tenant pays the landlord towards running and maintaining the shared parts of a building. That usually includes the reception, the lifts, common area cleaning and building services. It sits alongside rent and business rates. Your lease decides what can be charged, so it's the first document to check.
What is a service charge for?
A multi let office building has parts that no single tenant owns. Someone has to light, clean, heat, repair and staff those areas. The landlord usually arranges that work and recovers the cost from the tenants through the service charge. Each tenant pays a share set out in the lease.
You're likely to see cleaning and lighting of common areas. Maintenance of lifts and shared plant often appears too. So do reception staff and building management, often through a managing agent, plus repairs where the lease allows.
Shares are often worked out on floor area. That isn't the only method, though. The lease will say.
For a clear public benchmark, look at the RICS professional standard for service charges in commercial property. It sets out principles for how commercial service charges should be managed, budgeted and reported to occupiers. We don't quote typical percentages or average charges per square foot here. Buildings differ too much. A made up figure would mislead you.
What should you expect to see in the accounts?
Read the budget and the year end accounts together. The budget is the landlord's estimate for the year ahead, and you'll normally pay on account against it. The year end accounts show what was actually spent. The difference is then settled through a balancing charge or a credit.
Look for line by line costs rather than one lump sum. Each heading should be clear enough that you can match it to a service the lease permits. If a cost appears that you can't trace back to a lease clause, ask about it.
Check these points first. Does each item have a basis in the lease? How is your share calculated? Are management fees shown separately? Is there a reserve or sinking fund? Have large one off repairs been explained?
Ask for supporting invoices if something looks odd. That's a normal request. A well run building should be able to answer it within the terms of the lease and the reporting principles in the RICS standard.
Don't rely on a summary sheet alone. The real answers sit in the lease and the full accounts.
How does this sit with rent and business rates?
Rent, business rates and the service charge are 3 separate costs. Rent is paid to the landlord for the right to occupy. Business rates are a property tax collected by the local council, based on a rateable value set by the Valuation Office Agency. The GOV.UK introduction to business rates explains how the bill is worked out.
The service charge is different again. It pays for running the building.
Our area pages publish all in cost ranges that combine rent and rates. For example, the City of London office space page gives an all in cost usually between £70.50 and £150.00 per square foot, read on 13 Nov 2026. That range is made up of published rent from around £45.00 to £110.00 and business rates typically from £16.00 to £21.00 per square foot. These are published figures, not a formal valuation. They don't set a service charge band. Budget for that line once you've seen the actual figures for a building.
Serviced and managed offices work differently. There, the provider usually folds many running costs into one monthly fee, so the questions you ask will change. Our tenant advisory and flexible office service covers traditional leasehold space and serviced offices. Managed offices are included too, so we can help you compare the formats side by side.
Key takeaways
- A service charge pays for running and maintaining the shared parts of a building.
- It's a separate cost from rent and business rates.
- The lease sets what can be charged and how your share is worked out.
- The RICS professional standard is the public benchmark for how charges should be managed and reported.
- Ask for the budget, the last year end accounts and, where needed, invoices.
- Don't plan on a headline rent alone.
Morgan Pryce Partners Limited can review lease terms with you through our lease advisory service, which includes renewals and rent reviews on the tenant's behalf. We can't promise a particular saving. What we'll do is help you ask the right questions before you commit.
When this explainer is the wrong choice
This guide won't suit every reader. If you're already in a formal dispute with your landlord over a service charge, you need a solicitor. A general explainer can't replace advice on your specific lease and your rights under it.
It may also be more than you need. Perhaps you only wanted a headline rent for an early budget. In that case, the area pages give a quicker starting point, with dated rent and rates ranges.
And if you're buying rather than renting, the questions shift towards due diligence on the building as a whole.
Usually not. On a traditional leasehold office, rent, rates and the service charge are billed as separate items. Always check the lease. Serviced and managed offices are the main exception, because the provider often bundles running costs into a single monthly fee.
No. The landlord can only recover costs that the lease allows. If a heading in the accounts has no clear basis in a lease clause, you're entitled to ask for an explanation. The RICS professional standard also sets out how commercial service charges should be managed and reported, which gives tenants a public reference point when questions come up.
That can happen. You'll normally have paid on account against the budget, so an overspend is usually recovered through a balancing charge. Ask for the reasons behind any large difference, such as an unplanned repair. Then compare the explanation with your lease terms and the full accounts rather than a summary sheet.
Yes, as part of our lease advisory and office search work. We'll review the lease terms with you, set the service charge alongside rent and business rates, and help you compare buildings on the full cost of occupation. We don't promise a fixed saving. To book a consultation, call 020 3987 6200 or email info@morganpryce.co.uk.
