Service charge is it too high?

ahfat41

Service charge of £1300 a year for 1 bedroom flat in London. It only includes building insurance I find it a bit high or is the normal charge for London? Freeholder is Camden.Thanks.

https://www.rightmove.co.uk/properties/85603050#/?channel=RES_

eddddy

ahfat41 said:

It only includes building insurance I find it a bit high or is the normal charge for London? 

Are you sure it's only for building insurance?

Streetview suggests there might be communal hallways, communal staircases, entryphones, parking areas, open spaces, and maybe even private roads. The service charge would normally include your contribution to maintaining and repairing those things.

hazyjo

Perhaps there are major works on the horizon and they're building up the sinking fund. I always advise extreme caution when buying ex-LA, which I presume this prob is, as they tend to spring major works on you which are often very expensive. It may be a good thing as indicates they save for works. Also prob means they're mostly privately owned.

bouicca21

Ask the vendor for the previous service charge demands and accompanying accounts - then you will see just what you get for your £1300.

ahfat41

It does not include sinking funds if it it did, that amount is acceptable. Estate Agent said building insurance and servicing communal areas. Since  Camden is the freeholder, is it an ex local authority I need to ask. Thanks

user1977

ahfat41 said:

It does not include sinking funds if it it did, that amount is acceptable. Estate Agent said building insurance and servicing communal areas. Since  Camden is the freeholder, is it an ex local authority I need to ask. Thanks

Right, so it doesn't "only include buildings insurance".

"Camden" isn't a thing, I presume they mean "Camden Borough Council" i.e. the current local authority. Though if they're being that vague you may wish to check.

eddddy

Camden Council provide a lot of info about their service charges here: https://www.camden.gov.uk/service-charge-insurance-and-freeholders

You can even download their 88 page service charge guide, which appears to explain their service charges in great detail!! But not everything (like communal heating) would be relevant to the flat you're looking at.

Rumana03

ahfat41 said:

Service charge of £1300 a year for 1 bedroom flat in London. It only includes building insurance I find it a bit high or is the normal charge for London? Freeholder is Camden.Thanks.

https://www.rightmove.co.uk/properties/85603050#/?channel=RES_

That sounds like a normal amount for London. But have a look around the building to see if it has been well maintained..like is the stairwell etc areas all clean and tidy? If it seems like the money is being well spent then I don't see the harm.

We saw a flat in London where the service charge was £1400 but the building was disgusting and looked filthy..hadn't been cleaned and smelt gross. So that was a blatant no from us.

diystarter7

Never mind it being "high" which I doubt it is.
NB: Check the previous ten years rises to get an idea by the amounts these charges going up.
This will only be an idea but better than nothing.
If in recent 2/3 years they have shot up you need to find out why/etc
and then decide.

AlexMac

ahfat41 said:

It does not include sinking funds if it it did, that amount is acceptable. Estate Agent said building insurance and servicing communal areas. Since  Camden is the freeholder, is it an ex local authority I need to ask. Thanks

Assuming you have asked, and it IS ex local authority and that the freeholder IS Camden Council I'd say £1,300 is reasonable, based on my experience of owning about 4-5 leaseholds over the years. 

I currently have two far less attractive (in fact, rather scruffy) ex-local authority flats/maisonettes in SE London.  Last year I paid just over £1,000 Service Charge on each; made up of a start-year estimate of about £800-odd, plus a £200-odd top up based on actual end-year expenditure.  So you could check if the £1,300 is actual or just the current year estimated forecast which could creep up?   

My Service Charges don't include any "sinking funds"; just insurance, caretaking, estate grounds, repairs and communal lighting etc.  So every 8-10 years or so I tend to incur a bill of anything from £4-5k for major cyclical maintence; external decoration, balconies, replacement windows, etc.

Having said that, my Council as Freeholder is really fair and reasonable, good at communicating and allows you to stagger the bigger bills over 12-24 months (this should only really apply to resident owner-leaseholders, but they've actually let me spread the payments even though I let 'em out!)

Your solicitor will ask about Service charges, any known or Consulted pending major repairs and, for example when the communal parts were last decorated (if that's a Freeholder responsibility) as part of their standard "LPE1"; Leasehold Property Enquiries.  But you could ask em to add questions about what actual costs have been in recent years,including any major or cyclical repairs. 

Looks a nice tidy property; good luck 

Mildreds_Earrings

ahfat41 said:

Service charge of £1300 a year for 1 bedroom flat in London. It only includes building insurance I find it a bit high or is the normal charge for London? Freeholder is Camden.Thanks.

https://www.rightmove.co.uk/properties/85603050#/?channel=RES_

Hello there, make sure that your Solicitor requests a breakdown of the annual service charge statement from the Seller. The Seller should be able to request this document from LB Camden. 

Also, make sure either you or the Seller (can be either one) purchases the LPE1 form (leaseholders property questionnaire pack) from LB Camden, as it will again provide the annual service charge breakdown AND let you know about any planned major works to the building, as well as estimated costs. All the best.