Could my service charge be making my flat unsellable?

Kacsa99

We have been on and off the market or more than 2 years now.  We have had an underwhelming number of viewings in that time with no great success.  One very low offer I couldn't entertain which now, in hindsight, is looking perhaps a bit more entertaining.  We could rationalise the low activity at first in the context of Brexit and people's uncertainty and nervousness so had not troubled ourselves too much since we did not have a pressing need to move - just a desire for more space.  Once the Brexit blockage seemed to shift in the early part of the year we went  on again but since then nothing at all.  Covid didn't help but only one viewing since the beginning of March (last week) and that was a bit of crowbar effort by our agent who was showing another property nearby.  

https://www.rightmove.co.uk/property-for-sale/find.html?searchType=SALE&locationIdentifier=POSTCODE^1202982&insId=1&radius=0.0&minPrice=250000&maxPrice=300000&minBedrooms=&maxBedrooms=&displayPropertyType=&maxDaysSinceAdded=&_includeSSTC=on&sortByPriceDescending=&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&newHome=&auction=false

We went on with a second agent recently and dropped the price by about 10%. This has not resulted in any increased interest even though my market report from the agents both show sustained spikes in page viewings.  It's frustrating, particularly when you read of the high demand for properties in general, housing shortages etc.

I am beginning to think our service charge could be part of the issue - with the combined cost of house and grounds it is just shy of £300 per month.  Now we knew it was quite a lot when we moved in (although a little less then) but could justify it in the sense that any property needs maintaining and we would have to pay upkeep on any property regardless  - this was just a defined monthly budget for doing so.

Its a lovely flat in a lovely setting which wont suit everyone's circumstances, I know. But surely it should appeal to some.  I cant quite understand why I am getting no footfall at all and, frankly, starting to feel trapped in it.

I cant do anything about the service charge, at least not unilaterally.  What other options are there?  Dropping the price hasn't made a jot of difference (in fact I had more viewings last time around when the asking price was higher).

Any advice offered gratefully received.

numbercruncher8

The short answer is no, unless there are some complications with it that is disliked by lenders.

The long answer is that people generally have a set amount of money to play with every month, and the service charge comes out of that.

Thus reducing the price gives people more money, and therefore they are able to afford the charge.

And then there is competition..... you can see there are freehold houses in the same postcode for the same amount of money, which then don't have £300 a month expenses attached. Given the current environment where gardens are more valuable, you can see these would be more favoured.

TBH it looks tough to sell something there due to numerous options being available.... there was another modern flat that took 2 years to sell, going down from £300k to £225k.

Hannimal

Unfortunately, I would not consider viewing this because of the service charge. Is there any guarantee the service charge will not change? Can you include a little bit more specific information about what is included in the charge? it's such a beautiful property, I do hope someone snatches it soon. 

Grumpy_chap

£300 per month will definitely mean that BTL investors are not interested - that is a big lump of potential purchasers out of the frame.
2-bed £270k likely to be a FTB target.  Many FTB's are stretched for affordability so having to pay the mortgage and then another £300 on top every month is a lot.  You also have to ask, of those that can afford the mortgage plus £300 per month, will they want to spend the money on lovely gardens, or nice furniture, or a car, or even have money left over for holiday / leisure / gym?

davidmcn

£300/month does seem a lot - where is it actually going?

numbercruncher8

There are 3 acres of land to maintain - guessing the upkeep might be quite high. Doesn't look like there are many flats there to spread the cost across. Per flat that's only £3,600 a year. 

bouicca21

What is the target market?  Although the sitting room looks comfy and inviting the other rooms are very small, and personally I would be put off by the kitchen.  I can’t work out whether it’s meant to appeal to families (lovely grounds for children to play in, but hard to keep an eye on them and 5 miles to a station, so not a great commute) or someone older.  I suspect the problem is that it is marmite, and with a service charge of £300 a month, expensive marmite at that.  

Hannimal

For someone whose budget to buy is around <£280k, an annual £3600 is not "only". It is a lot of money. That is more than what reaches their account on their payday each calendar month after tax and other reductions, assuming this is top of their budget, they're buying alone and they have a 20% deposit. 

Kacsa99

2/3rd of the charge is on the house and a big chunk of that is for the reserve fund to cater for the roof of the Manor, external brickwork and the unexpected (of which we get our fair share - last year it cost us £8k to remove a beehive from a chimney!!).  Next biggest expense is on building insurances then its all about general repair, maintenance, fire detection, cleaning, then management fees. The estate charge covers all the gardening, tree care (dozens, all under TPO's), maintenance of the drive and the wrought iron and stone gates.  Its all Grade II* listed so has to be just so, of course.

Bouicca21 -  Target market certainly not FTB, more likely older demographic, possibly downsizer after relationship breakdown where there was a property to split so a cash buyer less encumbered by mortgage plus SC (That was a common theme of the viewings we had).  Lock and leave second property, maybe??  Interested in your kitchen comment.  Can you be more specific about what puts you off?

Numbercruncher8  - there are 21 properties across the estate as a whole but only 9 in the Manor House.

theoretica

For an older demographic is there a lift or is it only stair access?

As a potential buyer I would be relieved to know the £300 mostly went to a roof fund - sometimes service charges just cover the day to day and minor stuff and there are more nasty surprises on top.

Kacsa99

Theoretica - not so good for the mobility impaired, I am afraid.  First floor so flight of stairs involved.