House Vs apartment – why should I pay rip-off apartment service charges?

hodd

Greetings all


I would just like to generate some discussion and input on this topic.


I am a Brit living and working in Europe, but for personal and tax reasons, I would like to take out a mortgage on a UK property to live in at weekends and holidays and possibly rent in about ten year’s time. In the area I am interested in, a one-bed apartment costs about £145K, but the annual service charges seem to be around £1300.

Doing a few basic sums with the current interest rates, if I spent this £1300 instead on monthly mortgage payments, I would be able to borrow £20K more. As houses in the area start at £165K, assuming the bank agreed to lend me the increased amount (my deposit would be about £65K), I reckon I would be better off buying a house.

I can see pros and cons. For example, council tax would be higher on a house as would repair costs for a new roof, etc. On the other hand, I am a bit uneasy about apartments in the area having leases of 70 years or so, which cannot be conducive to sales in the future.

So, purely for financial reasons, would I be better off buying a £165K house instead of a £145 apartment?

ognum

I try to avoid flats because of the issues with neighbours all around but I guess it depends on how much you enjoy maintaining the exterior of your property because the service charge will do that it will also pay to maintain the grounds etc.

Sometimes it also depends on the location you want, you may well be able to afford a flet but not a house in your chosen location.

propertyman

Its a personal and financial decision. Not all service charges are rip offs...!
MSE naturally features the bad ones as those are the members seeking help and advice..

I would not be buying a lease with 70 years its almost impossible to mortgage and should be worth significantly less than comparable flats with leases of more than 90 years.

dimbo61

If you can afford a 2/3 bedroom house you will get a better rent and if you go modern with UPVC windows, plastic sofits+ facia boards, gas central heating with modern boiler it will rent easier and for more££ every day of the week. its also easy to maintain!
families want houses ( with even a small garden) couples want houses, 2 friends wanting to share want a 2 bedroom house.
Where do you want to live ??? a small one bedroom flat or a house ( Think about it )

pioneer22

Everytime house for so many reasons.

Garden
No neighbours all round
Potential to expand/extend
More for your money.

Humphrey10

hodd wrote: »

I can see pros and cons.

I can only see cons for buying/renting/living in a flat, and pros for buying/renting/living in a house. I'm not sure anyone wants to live in a flat, it's just that in some areas flats are all that is available or affordable.

Tr1pp

I appreciate how you feel about management fees, I dont like them either but they have their advantages and not everyone sees them as a rip off.

you say you will be living in this place on weekends and holidaying in it?

I assume the place will be empty during the week?

who will mow the lawn? - I assume you wont want to be doing the gardening every other weekend when you get back
will you keep the heating during the week to prevent damp in the winter? - you will have to spend time and money redecorating damp and mouldy walls

these are a few VERY small issues that will likely arise with infrequent use of a property then you have the larger issues like possibly replacing a roof. these all cost of course.

If I were living in a house £1300per year safety net would not be a bad thing to have.

If you consider the maintenance problems that could arise from a property that you only live in part time then £1300 seems sensible

Kirri

I'd go for a house, I wish I could of.. our service charges have gone up by a big percentage since I moved in, the directors keep thinking up stupid and unnecessary things to spend our money on and charge us for, little or no control over what is done repair wise, plus there is ground rent on top and there's no control over the buildings insurance - we were being ripped off for £260 each on a studio flat! If you need to renew a lease, maybe another 15k to find.

Then don't get me started on communal car parks with people parking in other people's spaces, irritating tenants who change frequently and communal grounds with incompetent gardeners and cleaners that don't do a very good job.

Tr1pp

Kirri wrote: »

we were being ripped off for £260 each on a studio flat!

per month?!

thats insane

Strapped

hodd wrote: »

Greetings all


I would just like to generate some discussion and input on this topic.


I am a Brit living and working in Europe, but for personal and tax reasons, I would like to take out a mortgage on a UK property to live in at weekends and holidays and possibly rent in about ten year’s time. In the area I am interested in, a one-bed apartment costs about £145K, but the annual service charges seem to be around £1300.

Doing a few basic sums with the current interest rates, if I spent this £1300 instead on monthly mortgage payments, I would be able to borrow £20K more. As houses in the area start at £165K, assuming the bank agreed to lend me the increased amount (my deposit would be about £65K), I reckon I would be better off buying a house.

I can see pros and cons. For example, council tax would be higher on a house as would repair costs for a new roof, etc. On the other hand, I am a bit uneasy about apartments in the area having leases of 70 years or so, which cannot be conducive to sales in the future.

So, purely for financial reasons, would I be better off buying a £165K house instead of a £145 apartment?

You're not comparing like-with-like. The service charge does actually (in theory) get spent maintaining the building and grounds. If you buy a house, and spend the £1300 on mortgage payments then how will you maintain your property? Do you want to spend your weekends doing DIY and tending the garden (as many of us do - and enjoy it - but if you are not there during the week, it changes the picture a bit). Even DIY'g costs for materials and tools.

Having said all that, if I could stretch to it, I would plump for a house. I always have.

wnoktnwbr

Humphrey10 wrote: »

I can only see cons for buying/renting/living in a flat, and pros for buying/renting/living in a house. I'm not sure anyone wants to live in a flat, it's just that in some areas flats are all that is available or affordable.

Really?

I can understand a family wanting a house, but I'm a single male and absolutely love living in a flat (well, apartment) and would pay more for an apartment than I would a house.

I didn't realise the majority of people disliked them!