Office Service Charges: £20M Saved in 2024 and What to Expect in 2025

Office Service Charges: £20M Saved in 2024 and What to Expect in 2025

The early days of 2025 are a good opportunity to look ahead to the coming year and consider the challenges we faced and successes we achieved in 2024.

The Office Team at Assure had another great year, saving £20 million for our clients.  Savings have arisen from a wide range of challenges, which have included identifying accounting errors and discrepancies and challenging budgeted expenditure and major works.

In 2024, most clients faced notable increases in budgeted service charge expenditure, partly mitigated by lower utilities costs.  The 2024 budgets accounted for the impact of high inflation, now easing, and substantial rises in the Living Wage.

We’ve begun receiving 2025 budgets on behalf of our clients, and the results so far have been mixed, with both reductions and increases.  We will be conducting further analysis in the coming weeks as more budgets are received, and we will share our findings in the upcoming Assure Index 2025.  Once again, many budgets have not been issued on time – despite the early December deadline for a January 2025 year start to comply with the RICS Code.  This continues to be a significant failing for many managing agents.

Allied to the previous point, there is a strong case for landlords and managing agents to offer greater flexibility in budgeting.  In many aspects of life, budgets are adjusted to reflect changing circumstances, yet with service charge, tenants often face delays of several months before receiving refunds for excess monies paid on account.

Landlords are quick to increase budgets when faced with higher than anticipated costs and where leases permit. They should be equally prepared to reduce budgets and on-account demands where possible.

Assure has been assisting some of our retail clients with sub-tenant cost recovery for some time.  Recently, we’ve expanded this service to our office clients, including one where our client is both the tenant and the managing agent appointed by the landlord.  This marks an exciting new business area for us, with significant growth expected in the coming years.

The Office Team underwent a reorganisation towards the end of 2024, resulting in the creation of a dedicated Building Consultancy team, led by Tim Parkin, Director of Building Consultancy.  This new structure will enable us to place increased focus on reviewing and challenging major works, aiming to deliver even greater savings for our clients.

2025 looks set to be an interesting year!

Assure Consulting is the UK’s leading professional service charge & lease expense consultancy.  Offering a unique occupier-focused approach to generate significant property cost savings for large corporate occupiers.  In 2024, we generated savings of £46M for occupiers across the UK and Internationally.  To learn more about the services we provide and how we can support your business, complete the contact form below.

 

 

 

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