New-Build Mortgage application refused because of Service Charge!! Help!

MWT

Cheese1990 said:

... but their could be a clauses stating that it increases x% each year ...

The problem with freehold property is that these charges often have no limits on increases at all, which is what makes the lenders nervous and of course should be a concern to the potential buyers as well... 

[Deleted User]

is it definitely a service charge or is it maybe an estate rentcharge?  

What can the management company do if you dont pay the service charge?  Thats usually what concerns lenders more

lonibra

Redwino222 said:

It is a steep service charge.  Slightly more than I paid for an apartment and that included lifts, window cleaning P, sinking fund for roof etc and communAl insurance.

to be honest it would put me off buying so I can see where the lender is coming from.

are other houses selling okay in the development?

Less than £30 monthly service charge to a flat leaseholder for all that? Which year are you talking about. Please do share which development this is?

missile

£30 a month seems very reasonable. Wish my service charge was that low

Sam3007

Cheese1990 said:

Silly question but have you asked your solicitor about the service charge too? As it may be only £30 a month at the moment but their could be a clauses stating that it increases x% each year and that your also reliable for any renovation costs or landscaping of the communal areas too. Meaning not only could that service charge be nearer to £100 a month but also you may suddenly get a bill of several £1000's which could mean that someone else wouldn't buy it and meaning the bank would struggle to sell it on

Will such details be included in the sale contract? The only thing I could find in the contract is that the service charge is exclusive of Value Added Tax 

Sam3007

Redwino222 said:

are other houses selling okay in the development?

We have been told that more than 90% have been sold off-plan

davidmcn

Sam3007 said:

Cheese1990 said:

Silly question but have you asked your solicitor about the service charge too? As it may be only £30 a month at the moment but their could be a clauses stating that it increases x% each year and that your also reliable for any renovation costs or landscaping of the communal areas too. Meaning not only could that service charge be nearer to £100 a month but also you may suddenly get a bill of several £1000's which could mean that someone else wouldn't buy it and meaning the bank would struggle to sell it on

Will such details be included in the sale contract? The only thing I could find in the contract is that the service charge is exclusive of Value Added Tax 

The details of how the service charge operates will be in the title deeds, which your solicitor should be explaining to you (not sure whether you're at that stage yet). It's not going to say that it increases by a fixed percentage each year though, it will cost whatever the services actually cost from time to time.