would 2.3k service charge put you off?

itsgototstop

[IMG]file:///C:/DOCUME%7E1/Nat/LOCALS%7E1/Temp/moz-screenshot-1.jpg[/IMG]http://www.foxtons.co.uk/property-for-sale-in-shepherds-bush/chpk0310873

would the above put a buyer off? investigation reveals that it doesn't include any major works etc, its just the running costs, they have asked an extra £1k for the LAST 2 YEARS for lift and for boiler costs on top???

seems high for a block of 50 flats

any thoughts?

KiKi

It would put *me* off, yes.

I sold a place last year (1 bed flat) with Service of £1200/year, and it was a struggle for that alone. The service charge had gone up from £800 a year to £1200 in THREE years.

On top of that, I had to pay £3200 + £1200 + £1700 for additional works in the last two years I was there. It crippled me.

So seeing £2.3K - and any other works on top - would absolutely put me off, and I wouldn't take the risk, personally.


KiKi

PasturesNew

Yes it would put me off.
But, to be honest, most service charges would put me off.

I would be thinking "That is £40/week to pay out forever ... and it will increase". Imagine yourself in reduced circumstances, low pay, sick pay, on your pension. How much of a major commitment is that then?

And then there are the other repair bills that may (will?) crop up that you will be obliged to pay. £000s for exterior works, landscaping, resurfacing parking area and painting lines. All costs you have no control over pretty much.

However, on a property priced at £300k (as your link is), it's peanuts.

You must be on a bob or two to be buying something so pricey so probably don't ever think you'd be in reduced circumstances.

Having said all of the above, I'd not want a flat except in extreme circumstances (ONLY choice). Too many rules, other people spoiling your quiet enjoyment, service charges, lack of official "ALL MINE" parking and my own private space to hang my knickers to dry!

itsgototstop

hi,

No I was interested as I used to own there, traded up2 years ago, one of my friends is selling and no one will buy

when i was there it nearly bankrupted me, new boilers lift broke, no sinking fund etc etc

now share of freehold

but she can't sell and we think it might be service charge?

KiKi

May well be, but it's also not a great time to be selling as lot of buyers are waiting for prices to come down.

If it came with a share of the freehold I'd be more interested, but only because as a freeholder I'd be looking to see how those costs could be gotten down. In a block of 50, that's £115,000 a year, for insurance and to run the building.

Is she getting people through the door in the first place? Are the EAs getting phonecalls about the place?? She needs to work out where her flat is falling off the radar. If the EA is a large chain EA that don't proactively sell and give feedback, she might be better off changing EA.

When I sold, my EA updated me every week on the number of calls about the place, the number of viewings, chased every interested person for feedback and passed it on to me, so I knew where the problems were. Might be worth a call in to them.


KiKi

olly300

Services charges that high would put people off simple because service charges normally go up the longer you own a flat i.e. the costs of labour doesn't generally go down.

Even if you can afford an expensive flat (and I know people who easily fall into that category) it doesn't mean you want to be ripped off.

When I was looking at flats last year EAs would specifically point out the flats with high service charges and they would sit on the market for 3 times as long as the ones with lower service charges.

itsgototstop

hi,

it costs 25k for managing agents, 25k for gardener ( staff flat and bills and low wage), the rest is i think bins, alarm water etc but no sinking fund and no repairs done apart from boiler and lift in last 20 years ( 30's block)

ground rent brings it up to 2.5k and to renew lease is 20k, most leases there low now

sadly for her they now have a residents association who al hate service charges and refuse to pay etc, this comes up in conveyancing ( when i left it was just being set up so not an issue)

even for a 300k flat and really its only worth 275k charges are steep and she is desperate

itsgototstop

i forgot to say, i bought there 8 years ago when serice charge and ground rent was about 600 a year, it has steadily gone up

is it worth her sitting tight and fighting charges via residenta association or just getting out? do you think

they are with erinacious

Generali

The service charge plus also your friend is asking £300k to live in a 2 bed flat on the Goldhawk Road. I have nothing against Shepherds Bush but wouldn't pay 10 times average household income for a flat there. Plus the £10k it's going to cost me to move in!

Is there anything in the contact about the service charge and how it can change? Has the management company produced audited accounts? It sounds like either the mgmt co is making money out of the block on the service charge (not allowed???) or that the service charge was deliberately set low initially so as not to frighten buyers off.

PasturesNew

The market IS slow.
The market for flats is slower.

If she's really desperate, she should take a good hard look at how much she is asking, how much the same/similar flats have ACTUALLY sold for in the last 2 years - and see if she can re-price it. Re-pricing it might even mean something as radical as dropping to £250k just to get rid. Depends on the market/level of desperation.

Also, get her to speak to the estate agent and ask him bluntly "what is the market like? tell me warts n all why you think this flat hasn't sold. Is there anything I can do to change this flat to make it more appealing?" It might be that the EA says "drop price by £10k, change that lampshade in the living room, put 100 watt bulbs around to make it look brighter". Or he might say "Can't sell flats for love nor money at the moment. Sorry."

Good luck! Nice of you to help her.

EdInvestor

This flat seems to be the only one on the whole Foxtons site quoting lease and s/c details.All the others state "to be confirmed". It's thus hard to say if people are being put off, as it's impossible to know what's normal for the area, or whether it's simply that the market is dead - half of London seems to be out of town for a start. I'd ask Foxton's to take the details off the website - or put them on for all the other flats up for sale.