Advice on offer for flat in London

AdrianC

peterbaker wrote: »

I say again, £560,000 is a lot of dosh to put on one number on the roulette wheel.

Whether it is or not is a separate question. That's the ballpark open market value for a flat of that type in that area.

You want something "better"? It's going to cost more.

No - I wouldn't, either. But we're not the OP.

LdnBuyer2019

Thanks for the detailed response peterbaker. We know that the builder still holds the freehold, but not much else about the lease or details of the SC. Can one get these in advance, or is that part of the checks done after the offer is accepted?

I'm not sure about the flammability of the cladding. Is this something the survey would look into?

Cheers!

Vestra

£595k for a 2 bed in Dalston with a £3k service charge, absolute madness.

peterbaker

LdnBuyer2019 wrote: »

Thanks for the detailed response peterbaker. We know that the builder still holds the freehold, but not much else about the lease or details of the SC. Can one get these in advance, or is that part of the checks done after the offer is accepted?

I'm not sure about the flammability of the cladding. Is this something the survey would look into?

Cheers!

You can I think get a copy of the lease, or at least an example of a similar lease in the building online off of landregistry.gov.uk for perhaps just £3.50. If it isn't available under the exact address of the flat then an example is almost certainly available as part of the title deeds on the building freehold.

It is remotely possible that you can get some service charge detail off of companieshouse.gov.uk if there is a specific company in whose name the service charge is collected and spent just for your building or group of buildings under the same leases and no others. However the modern trend is for such companies to declare themselves "non-trading" (and thus not for profit) and take advantage of not being required to declare publicly any full accounts. They are then only obliged to provide hopefully independently audited annual service charge accounts to leaseholders. So your seller will have these.

If this is your first lease, and it is beginning to sound like it might be, please do not jump in with both feet. Leasehold really is an unregulated minefield full of sharks if you'll allow a mixed metaphor!

sal_III

LdnBuyer2019 wrote: »

About the SC, the other modern building has a gym and concierge. This one has neither. We don't know the details of the sinking fund, but the estate agent said that the sinking fund is the reason the SC is so high (but most buldings with SC have a sinking fund, right?). It's basically a higher SC and you don't get as many benefits from it (from what we know now).

Without facilities like gym/pool or concierge £3200 SC is quite excessive. I would definitely ask for last years accounts to see where the money is going to. If it's sinking fund - good, it's just savings. But not all blocks have sinking funds or they are just a token amounts. Especially in new developments, where there is still warranty and there is no expectation for large bill repairs, so don't automatically assume there is SF.

LdnBuyer2019

Thanks sal_III. We'll definitely ask for last year's accounts to confirm there is indeed a SF. This would ease our minds a bit more about the high SC.

peterbaker

LdnBuyer2019 wrote: »

Thanks sal_III. We'll definitely ask for last year's accounts to confirm there is indeed a SF. This would ease our minds a bit more about the high SC.

Not unless you can logically see how the sinking fund is planned to be collected and expended, both long term and shorter term, it shouldn't (ease your minds). A sinking fund should not be a finger in the air "emergency" rainy day fund. Every penny should have a planned application which you should be able to formally request to see in writing as a leaseholder (though few do, largely out of ignorance of how their lease and building management should work).

It would also be useful to establish how accurate the overall service charge budgeting has been over all account periods not just the last (you've said it is a modern building I think e.g. like Kinetica Apartments in Tyssen Road? There should be certificated retrospective adjustments after the end of each service charge year which might indicate how accurately the budgeting has been done so far.

Not to do this research might be an indication that you aren't too concerned about losing the odd few tens of thou every now and then

Crashy_Time

Vestra wrote: »

£595k for a 2 bed in Dalston with a £3k service charge, absolute madness.

Yep, property has just become another asset to be pumped and dumped by big money, little buyers beware, especially as Brexit looms.....

https://uk.reuters.com/article/uk-m-g-fund/mg-suspends-3-2-billion-uk-property-fund-as-brexit-takes-toll-idUKKBN1Y81ZY?il=0

Crashy_Time

"Don`t panic!"

https://www.bbc.co.uk/news/business-50658437

Problems in commercial property soon feeds negative sentiment for over-priced urban flats IMO.

bouicca21

Never thought I’d agree with Crashy, but 3 grand service charge with no gym, no concierge is totally crazy. I’d be going through the accounts very, very carefully. I pay less than half that on a 50 year old building on the other side of the river. Not as hip as Dalton. We don’t have a sinking fund, but even so ...