Block Management Costs Explained
How much does block management cost? Understanding block management charges is essential before appointing a managing agent or reviewing your current arrangement. This guide explains what determines block management fees, what should be included, and how to ensure you receive genuine value for every pound of your service charge.
What Determines Block Management Costs?
Block management costs are influenced by several factors specific to each building. There is no single fixed price that applies to every development, which is why understanding the variables is important when evaluating quotes or benchmarking your current management fees for flats against the wider market. The following are the primary factors that affect how much you will pay for professional block management.
Number of Units in the Building
Block size is the single most significant factor in determining the per-unit management fee. Smaller blocks with fewer than ten units typically attract higher per-unit costs because fixed administrative work - budgeting, compliance, insurance arrangement, and reporting - is spread across fewer leaseholders. Larger developments benefit from economies of scale, reducing the cost per unit.
Scope and Complexity of Services
Buildings with lifts, concierge or porter services, extensive communal grounds, underground car parks, or complex mechanical and electrical installations require more management input and specialist contractor oversight. The broader the service requirement, the higher the overall management cost.
Location of the Property
Block management charges vary by region across the UK. Buildings in London and the South East typically attract higher fees due to increased operating costs, higher contractor rates, and the complexity of managing properties in densely populated urban areas. Buildings in the Midlands, North, and other regions often benefit from lower fee levels.
Condition and Age of the Building
Older buildings or those in poor condition require more reactive maintenance, more frequent compliance inspections, and closer oversight of major works programmes. This additional workload is reflected in the management fee, as the managing agent must dedicate more time and resources to keep the property safe and well-maintained.
Complexity of Lease Arrangements
Buildings with complex, inconsistent, or unusually drafted leases, mixed-use elements, or multiple freeholders require additional legal and administrative work. Interpreting varied lease terms for service charge apportionment, covenant enforcement, and consent applications adds to the management burden.
Level of Leaseholder Engagement
Blocks with active residents management companies or engaged directors may require more frequent reporting, more detailed meeting preparation, and additional communication. While this engagement leads to better-managed buildings, it does involve additional management time that is reflected in the overall cost.
As threads on forums such as the “Management companies” board on MoneySavingExpert frequently highlight, leaseholders are often unsure whether their current fees are reasonable. Understanding these cost drivers puts you in a much stronger position to evaluate any quote you receive. For a detailed explanation of what block management involves, visit our what is block management guide.
Typical Fee Ranges - Block Management Cost Per Unit
Average block management fees UK are most commonly expressed as a per-unit, per-month or per-unit, per-annum figure. This pricing model is widely regarded as the fairest approach because it scales with the size of the development and allows leaseholders to compare costs across different providers. Fees vary based on building size, number of units, and the services required, so the ranges below should be treated as general benchmarks rather than fixed prices.
The block management cost per unit tends to decrease as the number of units increases, because the fixed costs of administration, compliance, and financial management are shared among more leaseholders. Conversely, very small blocks often face higher per-unit costs because the same core work must be carried out regardless of building size.
When reviewing any quote, remember that the headline fee per unit per month is only meaningful when you understand exactly what is included. A provider offering affordable block management at a low headline figure but excluding compliance management, insurance arrangement, or Section 20 consultation will likely cost you more in the long run than a slightly higher fee that covers everything as standard.
Per-Unit Pricing - The Industry Standard
Most reputable block management companies charge on a per-unit basis. This means the annual management fee is calculated by multiplying a fixed amount by the number of flats in the development. The resulting total is included as a line item within the annual service charge budget that each leaseholder contributes to. This transparent model makes it straightforward to compare block management fees from different providers.
What Should Be Included in Block Management Fees?
Understanding exactly what your management fees for flats cover is critical when assessing whether you are receiving value for money. A reputable block management company will clearly set out every service included in the fee, with no ambiguity about what is covered as standard and what may incur an additional charge. At Block, the following core services are included within our standard block management fees.
Service charge budget preparation, demand collection, arrears management, and independently certified year-end accounts
Coordination of planned preventative maintenance and reactive repairs across all communal areas
Health and safety compliance including fire risk assessments, electrical testing, gas safety, and legionella checks
Competitive buildings insurance sourced through our broker network with full claims management
Section 20 consultation management for qualifying works exceeding the statutory threshold per leaseholder
Dedicated named property manager as your single point of contact for all building matters
Regular management reports, building updates, and annual general meeting facilitation
Online resident portal providing access to documents, accounts, and maintenance request tracking
For a comprehensive overview of how we manage shared buildings, visit our block management page. To understand how we handle the financial side, see our service charge management guide.
Fixed Fee vs Percentage-Based Fee Structures
Block management charges are typically structured in one of two ways: a fixed per-unit fee or a percentage of the total service charge budget. Understanding the difference is essential because the pricing model can significantly affect your overall costs and the incentives your managing agent operates under.
Fixed Per-Unit Fee
The managing agent charges a set annual amount per unit, regardless of the total service charge expenditure. This model is transparent, predictable, and easy to compare between providers. It also means the agent has no financial incentive to inflate the service charge budget, because their fee remains the same whether expenditure goes up or down.
At Block, we use fixed per-unit pricing for exactly this reason. Our block management fees are fully itemised and agreed before you commit, giving you complete cost certainty.
Percentage of Service Charge
Some managing agents charge a percentage of the total annual service charge budget as their management fee. This model creates an inherent conflict of interest: the higher the building's expenditure, the more the agent earns. This can discourage cost-effective procurement and lead to inflated service charges over time.
Discussions on forums such as the “London Property Managers for Small Blocks” thread on Reddit regularly raise concerns about percentage-based fee models and the lack of transparency they create for leaseholders.
Whichever model your current or prospective managing agent uses, always request a fully itemised breakdown of what is included. If you are unsure whether your current block management fees represent fair value, we can provide a free benchmarking review. Learn more about our transparent approach on our block management fees page.
Hidden Costs to Watch For
One of the most common frustrations raised by leaseholders - and a recurring theme on the “Management companies” board on MoneySavingExpert - is discovering hidden costs that were never clearly disclosed when the managing agent was appointed. A headline management fee that appears affordable can mask significant additional charges that inflate the true cost of block management substantially.
Undisclosed commissions on buildings insurance placements - some agents receive a commission from the insurer that is not passed on to leaseholders or declared in the service charge accounts
Contractor mark-ups where the agent adds a percentage to every maintenance invoice before passing the cost to the service charge, without disclosing the mark-up
Supplementary charges for services that should be included as standard, such as issuing Section 20 notices, attending AGMs, or providing year-end accounts
Administration fees for routine correspondence, leaseholder enquiries, or processing consent applications that other agents include within the core management fee
Exit fees or handover charges when leaseholders decide to switch managing agent, making it more expensive to leave than to stay
Separate charges for out-of-hours emergency calls, site visits beyond a set number per year, or contractor supervision on major works
At Block, we do not take commissions on insurance, we do not mark up contractor invoices, and we do not charge supplementary fees for services that should be included as standard. Our pricing is fully transparent, and every charge is explained before you commit. If you suspect your current agent is levying hidden costs, our team can review your service charge accounts and identify any areas of concern.
Ready to move to a more transparent provider? Visit our switch managing agent page to learn how straightforward the process is, or call us on 0161 371 7190 for a confidential discussion.
How to Compare Block Management Quotes
Comparing block management fees from different providers is not as simple as choosing the lowest number. A meaningful comparison requires understanding what each quote includes, what is excluded, and whether there are any supplementary charges that could inflate your costs over time. Here is a structured approach to evaluating quotes and finding genuinely affordable block management that delivers real value.
Request a fully itemised fee proposal from each provider, listing every service included within the headline management fee and any services that attract an additional charge
Ask whether the agent takes commissions on buildings insurance placements or marks up contractor invoices - transparent agents will disclose all income streams
Check whether the quote includes compliance management, Section 20 consultation, AGM attendance, and year-end accounts, or whether these are charged separately
Ask about the exit process - are there handover fees if you decide to switch agent, and what is the minimum contract term and notice period?
Request references from buildings of a similar size and type, and ask about the agent responsiveness, financial transparency, and overall quality of service
Confirm you will have a dedicated, named property manager rather than a rotating team or call-centre-based service
The cheapest managing agent is rarely the best value. Poor management leads to deferred maintenance, inflated contractor costs, compliance failures, and ultimately higher service charges for leaseholders. Investing in a competent, transparent managing agent saves money in the long term by keeping the building well-maintained and the service charge budget under control.
For further guidance on what to expect from a professional managing agent, explore our block management overview or learn about your rights and responsibilities as a leaseholder in our comprehensive guide.
Frequently Asked Questions About Block Management Costs
How much does block management cost?
Block management costs vary depending on the size of the building, the number of units, the location, the condition of the property, and the scope of services required. Fees are most commonly charged on a per-unit, per-annum basis and form part of the annual service charge budget that leaseholders pay. Smaller blocks with fewer than ten units typically attract higher per-unit costs because fixed administrative overheads are spread across fewer leaseholders, while larger developments benefit from economies of scale. The best way to understand the cost for your specific building is to request a tailored quote from a reputable managing agent who will assess your property and provide a fully itemised proposal.
What is a typical management fee?
A typical management fee for a block of flats in the UK is charged on a per-unit, per-year basis. The exact amount depends on the number of units in the building, the services included, the complexity of the lease arrangements, and the region. Blocks in London and the South East generally attract higher fees than buildings in other parts of the country due to increased operating costs and contractor rates. When comparing fees, always look at what is included as standard rather than focusing solely on the headline number, as a lower fee that excludes essential services can end up costing more overall.
Can I refuse to pay management fees?
In most cases, leaseholders cannot simply refuse to pay management fees. The obligation to contribute to service charges, which include the managing agent fee, is written into the terms of your lease. If you withhold payment, the freeholder or management company may take legal action to recover the debt. However, if you believe the fees are unreasonable or the services provided are inadequate, you have the right to challenge them at the First-tier Tribunal (Property Chamber). It is advisable to seek legal advice before withholding any payment and to document your concerns in writing.
What is a reasonable management fee for leasehold property?
A reasonable management fee for a leasehold property depends on the number of units in the building, the services included, the condition of the property, and the complexity of the lease arrangements. The fee should cover core services including service charge administration, building maintenance coordination, compliance management, insurance arrangement, and leaseholder communication. The Landlord and Tenant Act 1985 requires that all service charges, including the management fee, must be reasonable. If you believe your fees are excessive, you can challenge them at the First-tier Tribunal.
Are property management fees tax deductible in the UK?
For buy-to-let landlords who own a leasehold flat as an investment property, the service charge and management fee paid to the block managing agent are generally allowable expenses that can be deducted from rental income for tax purposes. For owner-occupiers living in their own leasehold flat, management fees are not tax deductible because they are a personal living expense rather than a business cost. If you are a freeholder who receives ground rent or other income from the building, management costs associated with that income may also be deductible. Always consult a qualified accountant for advice specific to your tax situation.
What is included in the management fee of a property?
A comprehensive block management fee should cover service charge budget preparation and collection, arrears management, year-end certified accounts, coordination of planned and reactive maintenance, health and safety compliance including fire risk assessments and electrical testing, competitive buildings insurance arrangement with full claims management, Section 20 consultation for qualifying works, a dedicated named property manager, regular management reports and AGM facilitation, and access to an online resident portal. Any additional services such as major works project management may incur supplementary charges. Always ask for a fully itemised fee proposal so you know exactly what is covered.
Get a Transparent Block Management Quote
Whether you are looking for a managing agent for a new development, want to switch from your current provider, or simply want to benchmark your existing block management costs against a transparent alternative, we are here to help. Every quote is tailored to your building's specific needs, with no hidden charges and no obligation.