Sanity check - Buying a 1 bed new build with estate charges

snowqueen555

lookstraightahead said:

What are estate charges?

Op, if you do buy, I think an older flat might be better, because if prices go down, new ones on estates seem to go down first. 

Personally I do think house prices will come down, but I don't have a crystal ball either. 

Covers greenspace maintenance, play areas, sports grounds and all that stuff I probably won't be using. Every property in the development has to pay this fee, the council would not adopt it, and seems like a common thing for all new developments that are heavy on the greenspace.

jonnydeppiwish!

snowqueen555 said:

[Deleted User] said:

What part of bristol 

if it’s a new build and the lease starts after July last year at least you won’t get stuck with the ground rent issue as new builds only have a peppercorn GR

my son is buying in Bristol and knocked 15k off the price off a gorgeous 3 bed house in Whitchurch only last week and the sellers accepted it that day would 

He’s in a good position as chain free and he has a huge deposit 

he doesn’t have to do anything to it either it’s in show house condition so he can just move his stuff in 


There seems to be a lot of ex rentals on the market in Bristol at the moment and what I’ve noticed is hat a house either sells straight away ie within a week or it’s stays there for weeks and weeks before they reduce the price and it still doesn’t seem to sell

The ones that sell seem to be in excellent condition and don’t need any work doing to it 

I think your son has done well then. If I could get a house I would, no matter the condition. I would be in the BS16 area. I'd say the cheapest houses are probably £250k right now?

Yeah no ground rent but that bloody estate charge has replaced it.jonnydeppiwish! said:

snowqueen555 said:

Sarah1Mitty2 said:

snowqueen555 said:

Hello,

I'm a FTB in my late 30's considering buying a 1 bed newbuild out in the suburbs. I think they are struggling to sell it. It was on for £210k but I've negotiated it down to £195k which is good considering a lot of older run down apartments are going for £180k-ish that requires refurbishment or replacing things.

My main worries are trying to sell it on in the future. A lot of these new estates have estate charges on top of the service charge, this covers maintenance of the greenspaces. This is currently £140pa and the standard service charges are £1040pa. I am also paying the same fees as 2 bed flats so feel like it it expensive, unfortunately I have no control over that.

Should I give this a hard pass, I've been looking for a year and it has been pretty tough. I think I'd be happy there but worried about the saleability in the future, because it is only a 1 bed and also the possible off putting nature of the estate and service charges. I'd like a 2 bed but can't quite seem to be able to get one.

Pass this time, they will be cheaper in future, and so will 2 beds.

If only I had a crystal ball. I've been saving up close to a decade so this has been pretty long experience. I'm not sure prices will fall where I am (Bristol).

Do you love the flat/new development? Who are your neighbours likely to be? Predominantly Homeowners or rental?

With the properties that require work, are they liveable now (do they need a new kitchen bathroom at some point in the next 5-10 years or do they need it now)?

I would normally go for older buildings but others here prefer new. If you can get that off the new, what can you get off the older ones? Would it then stretch to a 2 bed?

The location is in a new suburb so mainly families, quiet but good connections to work.

Most properties available need work, liveable but lets say changing carpets, repainting and bathrooms and kitchens need work. It does surprise me how people don't look after their homes. But if they are 20k less than a newbuild it will surely cost £10k or more to do them up.

It would cost a few £s but you can do it over a longer period. Most new builds will go down in value as they are no longer new as you are paying that new premium

Sarah1Mitty2

Searching a five mile radius of Bristol is just price cut after price cut on PropertyLog.

snowqueen555

Sarah1Mitty2 said:

Searching a five mile radius of Bristol is just price cut after price cut on PropertyLog.

I think it's fair to delve deeper because there may be price cuts but there's always cuts. Are there more cuts now than last month?

Properties are still selling well here, everything on my watchlist sells, maybe they are below asking I don't know.

MultiFuelBurner

snowqueen555 said:

Sarah1Mitty2 said:

Searching a five mile radius of Bristol is just price cut after price cut on PropertyLog.

I think it's fair to delve deeper because there may be price cuts but there's always cuts. Are there more cuts now than last month?

Properties are still selling well here, everything on my watchlist sells, maybe they are below asking I don't know.

It's the same here lots have sold in the past two months.

April and May were peppered with Bank holidays and national celebrations. I suspect June and July will decimate available properties. Especially those presented and priced well which does appear to be happening here.

Sarah1Mitty2

snowqueen555 said:

Sarah1Mitty2 said:

Searching a five mile radius of Bristol is just price cut after price cut on PropertyLog.

I think it's fair to delve deeper because there may be price cuts but there's always cuts. Are there more cuts now than last month?

Properties are still selling well here, everything on my watchlist sells, maybe they are below asking I don't know.

I didn`t check last month, that is probably the first time I have searched Bristol, but it is early days, we have only just reached a critical interest rate (shocking that is still well below historical averages and causing so much panic)

Martico

BS16 has been on the up for a few years, and there's further to go. The change in Fishponds has been extraordinary, much like parts of Easton 5-10 years ago

snowqueen555

After a week of umming and ahhing I've decided against buying. It is a shame because it ticked most of the boxes, it was just the estate charge that worried me. It's supposed to go up by RPI but this year it went up 20%. Despite lots of complaints from residents they don't really care. It looks like they use a trailing 18 month rather than a 12 month. It still doesn't make sense, and going by that logic will probably go up a similar figure next year as inflation is still pretty high.

After 5-10 years the estate charge just becomes like an expensive ground rent. That on top of services charges has really put me off buying this flat, mainly because of my worry about reselling in the future. Also it is only a 125 lease. At some point in the future someone will have to extend that lease and the freeholder will get £.

My whole experience dealing with new builds is so negative. Every step of the way people are out to bleed you dry it seems, the whole system seems to be there just to milk a buyer of as much money as they can. Rant over.

The allure of a new build, everything is new, nothing will need replacing and I can move straight in. That was probably worth the extra £10k premium in my eyes.

eddddy

snowqueen555 said:

...it was just the estate charge that worried me. It's supposed to go up by RPI but this year it went up 20%. Despite lots of complaints from residents they don't really care. It looks like they use a trailing 18 month rather than a 12 month. It still doesn't make sense, and going by that logic will probably go up a similar figure next year as inflation is still pretty high.

That sounds very intriguing - can you explain the reference to RPI in a bit more detail?  Was it a general statement that somebody made, or is it part of a formula that appears in the estate charge deed?


An example of a general statement might be:

• "You should expect the Estate Charges to increase each year, roughly in line with inflation (RPI)."

Just like somebody might say:

• "You should expect the cost of your groceries to increase each year, roughly in line with inflation (RPI)."

Or is it something formal in the deed like:

• "You must contribute to a reserve fund each year, and you contribution will increase with RPI each year"

In which case, the reserve fund could build-up a big surplus or deficit. For example...

• One year there might be a storm which brings down a number of trees. There might not be enough money in the reserve fund to cover their removal and replacement.

JReacher1

I know it’s not ideal but you want to buy further outside Bristol which has good commuter links into the city. You’ll get more for your money and will be easier to sell in the future.