Services charges and ground rent for flats

ambroze

Hi, in the near future I'm am going to be looking for a flat (not a second home) to buy in the Cornwall area (poor parts!) for around £90k. Does anyone have any up to date figures on average prices for ground rent and services charges. I've searched online and the only info seems to be for expensive flats or new builds and in expensive areas, which wont apply to me. Thanks in advance.

Hoploz

This sort of thing is going to vary for individual properties. You're best off asking estate agents for the info on properties they have on their books if that is a guide.

Number one factor is lease length, as leases below 80 years can be problematic for lenders. (And even if you yourself are not buying with a mortgage it'll still be a headache whenever you eventually come to sell.)

always_sunny

it would depend on the lease pack and it'd vary for each property.
Older flat that had their lease extended via statutory route would have GR as peppercorn.
Older flat that had their lease extended informally may have it as £250/year doubling every 20 years! :eek:

When I was flat hunting I noticed that flats with long leases at around £200+ were all done informally so do ask whether it will double every x years and so on. 90 years ago £200/year on GR would have been pretty expensive!!!!

Service charge will also vary whether there's a lift, pool, gym, etc.

ThemeOne

They vary so much, and they also vary in what they cover, so I doubt any average figures could be produced.

All I would say is if it's a flat in a large block with lifts and lots of common areas / grounds to maintain, it'll be higher simply because there's more to pay for.

In some places the service charge only covers "day to day" maintenance - with leaseholders receiving specific, and sometimes large, bills for anything classed as major works e.g. lift / roof replacement etc.

ambroze

Thanks for all your responses. The flats I've been looking at on agents websites are all two story buildings, no lifts or grounds etc. I guess it is best to ask the individual agents of each property. Just wondered if I'd have to be forking out extra thousands per year for a small flat in a two story building with no mod cons and built in past 50 years. May be better off buying a small house in a dodgy area (which there's nowt wrong with that, but just thought my money would go further with a flat in a nicer area, being a young female living alone)

LEJC

Ask the agent when you book an appointment if they can gather the information prior to the viewing.....

The vendor should have a pretty good idea of the costs but they don't always pass the info on to agents.

As a side note also always check the length of the lease as this will have a significant impact on the purchase and possible resale if it is below 100 years.

Its probably difficult to guess the management fees and ground rent...I have 3 similar rental properties on different terms and the monthly costs range from £62 per month for the cheapest to £120 for the most expensive...all are 2 beds but differing ground rent and different levels of slush funds

Hoploz

Three of my flats work out about £1100 per year. Two are modern built 2000 and 2010, the other is a 200 year old conversion. None have lifts or additional services, it's just basic maintenance for common parts, small area gardening and intercom front door systems. It also covers buildings insurance.

There is work due to the old building which won't be covered so we will have a bill for that next year of approx £1000-2000 per flat. Part of the delights of period listed buildings.

The modern builds will hopefully be free of major works for the next few years at least.

Having said all that, we would only buy flats with what we consider to be reasonable service charges. We have seen service charges of £4000pa and even more than that in places, so you need to make sure you know what you're in for.

HTH

AlexMac

As you are discovering, it varies; for a property under £100k, I'd expect a service charge well under £1000pa; but it really depends on the freeholder, (e/g whether freehold is "shared" by you as leaseholder with other residents, or owned by an absentee freeholder who's charging for profit), size/age/condition of the block.

We recently bought in a coastal area - a one bed flat for £82.5k, with shared freehold, good (self) management, in excellent condition (new roof, recently decorated externals/communal areas ) and a strong sinking fund (repairs reserve kitty) but service charges of only £450 pa.

While searching comparable flats, we found ruinously mismanaged wrecks with service charges three times that and no evidence of what it was being spent on.

So ask. If they claim ignorance, or shilly-shally, walk away (or pay £700 legal fees and waste 2 months finding out the truth before you walk away). We do.

Or buy a freehold and decide yourself waht to spend the £400-£1k pa on.

And beware- we have mates who pay "4-5k pa; think how much you could borrow for that annual cost!

csgohan4

don't forget with leasehold, some charges double every X years, buyers beware