I’m a first time buyer. Love the flat I’m in – got approval in principle on the mortgage, beginning the process of negotiation with the landlord who’s keen to sell – private sale too.
Asked a few questions about the lease and service charge and apparently the service charge is £190pcm!
Now I’ve no idea about what’s normal but that seems extortionate. If I upped the amount I want to borrow by that much each month I could buy a house instead… which potentially means the bikes can go in a shed instead of the spare bedroom…

Depends where you are, what you are getting for the SC and how old the property is.

Here (in Bristol) lots of newer properties or ones with decent/lots of facilities will be around £1200-£1500 pa. £190 does seem quite high tho.

if its got a lift,flat roof, security cameras, is a small number of residents in a large building, also does it require work doing on it in the near future, all the above add onto the service c harge as does acountancy fees, insurance, and lots of other stuff.

Probably includes building insurance too. If not, then yeah, that’s expensive

that is a lot. But it wouldn’t hurt to see the accounts to see if it’s being spent on things like lifts, security etc or if they save it for repairs.

We have a £70 p/m charge but get hit with about £5-7k every 5 years so tbh I need to start putting £100 p/m away into a savings account so at least i am getting the interest on it.

How much?! Are you in London?

Service charges put council tax into context for me.

£100+ p/m to mow the grass and pretend to clean the communal stair cases, maintain the building etc against £90 p/m (for me anyway) toward running a city…

Cheers

Danny B

€330 a month here for a 120 sq M apartment, the service charge includes, water, hot water and heating, for which I got a €1000 rebate last year, so actually about €250 a month all in.

What you do need to check, if things in the UK are similar to Holland, is that there is plenty of cash in reserve for the owners association to cover any expected/unexpected issues in the future – a friend bought an apartment where the service charges had been buttons for the last 30-odd years, and they have no money in the pot to repair the roof, so each owner ended up with €6000 cash they had to find in a hurry.

Is the block of flats Right To Manage? If the flats are RTM you and other residents can pick the management company this insures you get best value for money. If it’s the lease holder who decides they won’t be fussed about you getting value*, it is possible to get RTM for the block if you get 50% of owners on board. My flat wasn’t RTM when brought it but after lots of hassle it is now and we got shot of crap management company. Worth finding out who the management company are as some of them are shocking.
*some lease holders will even use a company that’s a part of the same group. Get lease agreement checked out as there are some shocking ones about.

Mine is ex-council and service charge is about £10 a month. Every 7 years they’ll do a balcony repaint etc, cost for that was about £500. There was a notice a few years back regarding a charge to fit new arial/sky dish, but plenty of folk must have told them to do one, as the next letter said it was free 😀

Mine is £110 pm and I think that’s quite expensive. Bear in mind it can (and will) creep up over the years – mine is double now what it was 10 years ago.

A few years ago we did what Danny79 suggested (RTM) and, although it didn’t decrease the service charge, we can actually get things sorted now e.g. fire the gardeners/cleaners if they’re rubbish (both of which we’ve done!) Before we were RTM we found that, although the management company made the right noises when we complained, nothing actually get sorted.

Definitely find out who the management company is first if it’s not RTM. Google them to see if any other developments have problems with them. If they are Peverel/OM – run away!!

As above ask for a copy of the accounts, and ask about a management committee along with who the managing agents are, and what the service charge covers.

I own a flat in a block of 4 of a converted town house. A few years ago we enfranchised the freehold amongst the leaseholders and took over the ownership of the block in London and put a management company in to look after things.

The normal annual costs are:

Insurance £1,000
Accounts & Co. Sec £350
Utilities & cleaning £500
Management fee £600

We aim for a s/c payment of about £1,300 per flat + £800 from the commercial tenant which leaves us plenty that goes towards exceptional maintenance and a sinking fund. We are putting a fair chunk of extra in to build up to a £10-20k sinking fund to do some decoration and refurb work. But in terms of annual cost, each flat covers about £600.

Ask to see the accounts and dont forget to look at the sinking fund contribution – that is still your money, just held on account against future capital expenditure so you dont get hit with a big bill if something big goes bang.

The management co has earned it’s fee many times over by being brilliant dealing with a commercial tenant who’s an arse.

We pay £4k service charges in our place in that London.

Worth it I recon.

Is that just the service charge or does it include the sinking fund for major repairs? I pay over £3k per annum for my flat (about £2k service charge and £1k sinking fund). In addition in the 12 years I have lived here i have been asked to pay a further £19k as a 1/32nd share for a new roof.

Yes I agree about the buying a house comment.

If I upped the amount I want to borrow by that much each month I could buy a house instead…

A much better idea. If your mortage co agrees with the figures for both the flat and house . I suspect they wont (treating the SC as part of your optional spending – if that makes sense).

So basically if you can get a mortage on the house with no SC it make more sense to me than a flat with the same monthly mortage+SC that you cant borrow for / or invest in.

Christ 4k a year in service charges! I only pay at a couple of hundred quid more than that annually on my mortgage!

We do get quite a lot for our “investment” of £4k 😆

I really doubt I will buy a leashold/flat again.

I hate other people deciding how my money gets spent and I like to be in charge of any work. From now on it’s detached freehold property for me.

are you all mental? 16k as a 32nd share for a new roof? has no one heard of insurance?

in 30 years of home ownership my total bill for repairs has been 75 quid for a new ball valve and 1400 for new windows (both paid for by the house insurance)

are you all mental? 16k as a 32nd share for a new roof? has no one heard of insurance?

in 30 years of home ownership my total bill for repairs has been 75 quid for a new ball valve and 1400 for new windows (both paid for by the house insurance)

My friends management company on his flat decided to change all the numbers on the door at £35 a pop.
Management companies are vultures and there’s nothing you can do.
I nearly bought a flat once but the fees steered me towards a house. You never own your lease hold flat.

£half a million for a new roof??! Does it come with a missile defence system?!

Missile defence system ? as supplied by the government on flat rooves during the Olympics

The very same! Must be a few kicking round to surplus shops?

Ok amongst other things we get for our £4k, before anyone has a pop, we get:

Fully heated pool
Sauna
Steam room
Fully fitted Gym & Equipment
Underground CarParking
Secure entry/exit
Serviced cleaning ( you can ask them to do your Appt if you want at an extra charge of £50 week, we don’t )
Fully maintained building and grounds
Small parkland
We have lifts
We have 5 penthouse Appts ( no, no we don’t live in one )
We have very few folk moving in/out, all seem happy to stay so we don’t suffer with temporary letting, most have bought.

We have had a new lift system, fire system, the decorating gets done once a year in the access/entry/exit areas, carpark has been refurbed once ( new concrete layed and security lighting, fire sprinklers )

We have a communal area and most important we have an Owners Union whereby we have 50% say in any works undertaken by the Mgt Company.

I think for our money, we’ve done rather well.

4 bags of sand a year for that seems a bit rich to me, you could rent a new Audi on finance for that 😉

Ouch, I know that is that there London prices, but still ouch.

Yes it is That There London prices, Canary Bloody Wharf London prices at that.. 😆

Still a sexy place to have an Appt though.

😉

Do they have a concierge / door man ? Ask to see the annual accounts and/or expenditure, £190 PCM is high but not excessive.

We pay £110 pcm for an apartment, this covers basics like insurance, cleaning, gardening, regular maintenance plus small reserve for future large works – the management agent skims off 25% but not enough of the owners care to get rid of them and do it themselves.

£4k – ouch, underground car parking is something I’d think would be reflected in the purchase price not service charge.

Do you own this flat or not? If you do ‘own’ it then WTF are you effectively paying a rent as wel as your mortage? My advice is to walk away…