Service Charge and Ground Rent on House in London

cgfw201

Offer accepted on a Victorian house in SW London. We're about to exchange but have just had the management pack through from the freeholder detailing the costs payable to them.

We were told they would be around £500pa which was ok.

However, it is in fact
£1000pa ground rent
£500pa service charge
£500pa buildings insurance

It's a 2 bedroom ground floor flat, with one identical sized flat on the floor above with the same freeholder.

These costs £2000pa seem extortionate, but we have little to compare them to.

any advice?

eddddy

£1000 pa ground rent is high. That will make buying the freehold or extending the lease at some point in the future very expensive.

You should also check that your mortgage lender is happy with a £1000 pa ground rent.

ognum

Read the lease! Read it carefully!

This may be an escalating ground rent at x% a year and you may find the flat is unsalable in a few years.

The freeholder will want a lot of money to buy the freehold if he gets that much ground rent.

Be wary

hazyjo

I bet it's been put up that high recently as the result of a lease extension.


As above, tread carefully. In its favour, it may have a nice shiny new long lease that you don't have to worry about.


Over £160pm seems a lot to find (against £40-ish) which is what I think you were expecting.


Jx

lewishardwick

WOW!

The place I'm buying has £1,100 service (inc buildings insurance) and £60 ground rent.

It's always one of the first things I ask when looking at leasehold properties.

Racky_Roo

I pay £1500 service charge (inc buildings insurance) and £350 ground rent. That was pretty standard in all 2 bed south London flats I viewed. I guess you need to check what you get for that. Our building is maintained to a really high standard. It's cleaned inside twice a week, gardening weekly, and window cleaning monthly. That fee also allows for a large sinkage fund so we never pay extra - unlike previous flats I lived in where any big jobs required an additional contribution.

david1951

The amount of the service charge is (sort of) irrelevant - repairs/maintenance costs £X amount and this will be paid for by you, regardless of the amount of the service charge. It is paid regularly so the freeholder doesn't have to chase for money.

The ground rent is just an income for the freeholder. £1000pa is very, very high.

AdrianC

cgfw201 wrote: »

These costs £2000pa seem extortionate

Yes, they do.

any advice?

Don't buy that flat.