Service charges.

VeryMan

Hello!
I can only afford a flat, as opposed to a house, but most have extremely high service charges! At least £80-100 per month which I find ridiculous!

Do I miss something? For example is most of that amount towards a deposit that is refundable or something? Is there a way to negotiate that? Is it really so expensive to service a small block of flats???

Any advice?
thanks!

zarf2007

VeryMan wrote: »

Hello!
I can only afford a flat, as opposed to a house, but most have extremely high service charges! At least £80-100 per month which I find ridiculous!

Do I miss something? For example is most of that amount towards a deposit that is refundable or something? Is there a way to negotiate that? Is it really so expensive to service a small block of flats???

Any advice?
thanks!

how else do you expect the block to be maintained and for large items such as roof replacements, interior/exterior decoration to be paid for? you may get 'lucky' and find a block which doesnt do service charges and only has a small annual ground rent. This just means when major work is needed you are hit for your share (could be many 1000s at a time).

I know people who think no service charge is best but it is a false economy and I would rather live in a well maintained block with a sinking fund for emergencies, paying £80-100 per month than get hit for 1000s out of the blue every so often.

kingstreet

NB ground rent and service charges are included in lender affordability, so if you haven't factored them in before now, what you can borrow is going to fall.

eddddy

If you want to see the kind of things service charges are spent on, you can take a look at the doc below:

See "APPENDIX C: ILLUSTRATIVE EXAMPLE SERVICE CHARGE ACCOUNTS" - page 13 or 15 (depending on how you count the pages)

Link: http://arma.org.uk/downloader/bd3.pdf

[Deleted User]

Yep, service charges are an annoying fact of life in leasehold flats. Always check how much the service charge is, what it includes (e.g. ground rent, buildings insurance, routine maintainance and cleaning, a sinking fund saving up for bigger jobs). And don't take the estate agent's word for it.

The only way to reduce them is if you and the majority* of other leaseholders get a right to manage, and are able to live with a lower level of cleaning, find cheaper suppliers etc.
*not sure exactly how many - look up RTM on lease-advice.org

Hermia

zarf2007 wrote: »

how else do you expect the block to be maintained and for large items such as roof replacements, interior/exterior decoration to be paid for? you may get 'lucky' and find a block which doesnt do service charges and only has a small annual ground rent. This just means when major work is needed you are hit for your share (could be many 1000s at a time).

I know people who think no service charge is best but it is a false economy and I would rather live in a well maintained block with a sinking fund for emergencies, paying £80-100 per month than get hit for 1000s out of the blue every so often.

Indeed. I pay £450 every six months and don't begrudge it. The block is very well-maintained and there is a good amount of money in the sinking fund. The caretaker pops in almost every day which means problems are dealt with straight away. I work long hours so knowing I don't have to worry about the outside of my property, or the state of the car park or even putting my own bins out is a huge bonus for me.

glasgowdan

There's every chance you'd pay even more if the place needs a major repair or upgrade...roof, front door, security etc, these costs come up separately to the service charge

bouicca21

Of course if you own your house as a freeholder you never ever have to set aside money to do minor or even major repairs, never have to redecorate the outside or clear the gutters ...

elverson

The service charge should include buildings insurance and if you're buying with a mortgage your lender is likely to insist that you have this, whether you pay through a service charge or on your own.

eddddy

bouicca21 wrote: »

Of course if you own your house as a freeholder you never ever have to set aside money to do minor or even major repairs, never have to redecorate the outside or clear the gutters ...

I'm assuming there's an element of sarcasm there...

I guess the big difference is that when you own a house you are more likely to change light bulbs, clean the hallway, cut the grass etc yourself - rather than paying contractors to do it. Which reduces costs.

In theory, leaseholders could also do these jobs themselves, to reduce costs - but it rarely seems to work out well.

chelseablue

When I lived in a flat the service charge was £75 a month


We had to renew the flat roof while I lived there; cost almost £40,000, paid for by service charge funds that had built up over the years


So a service charge is worth having in my opinion