Service charge - what's reasonable?

[Sarah_W]

I'm looking to buy a flat (in converted Victorian property) to renovate with a £900 pa serivce charge and a £100 pa ground rent.

I presume £900 pa is going to put a lot of buyers off when it comes to selling. Is this the case and what do you folks pay?

[Simpo Two]

With your DIY skills you could negotiate a contract to do the service and make money instead of pay it

[rfn]

The service charge and ground rent on our flat comes to about £1000pa and most I looked at before renting here were fairly similar. I know I'm not paying it directly but it seems fairly standard?

[Beardy10]

Service charge at a minimum will cover building insurance which is normally a few hundred quid for each flat...so the lowest service charge/ground rent you could reasonably expect is say £400 to £500. Hopefully your £1000 covers cleaning of common parts and maybe contribution to a sinking fund?

[Sarah_W]

Beardy10 said:

Service charge at a minimum will cover building insurance which is normally a few hundred quid for each flat...so the lowest service charge/ground rent you could reasonably expect is say £400 to £500. Hopefully your £1000 covers cleaning of common parts and maybe contribution to a sinking fund?

Spot on - £500 of it is a sink fund which makes it seem a lot more reasonable. I'm buying thsi place to renvoate and sell on though, so worried that a £900 will make people look elsewhere. This flat will only sell for about £170k when renovated, so the service charge will be more relavant than someone paying 1k on a 400k flat in Putney.

Does this still sound reasonable?

[sjj84]

£1000 a year is pretty much the average price around me, it's what I pay too. Anybody buying a flat will expect to pay that sort of price if they've done any research.

[Zeemax_Mini]

I pay £1250/year, which includes garden maintenace, cleaning/lighting the communal areas, buildings insurance etc. The value of the property is about £250k - the service charge was on the high side but there is a fairly big garden and it's a big victorian conversion with just 6 flats, so everyone has a fairly big share.

Dom

[Jasandjules]

Having been looking at loads of flats for a friend, the service charges all seem to be around £900 p.a. - regardless of whether there is a garden and whether water is included..

[Wings]

Jasandjules said:

Having been looking at loads of flats for a friend, the service charges all seem to be around £900 p.a. - regardless of whether there is a garden and whether water is included..

+1 I have just requested our Management Company, that in order to both cover annual maintenance costs and to prevent “our” account going into arrears at the bank, the annual service charge, should increase from £720 pa to £1440 pa.

So I believe a service charge of £900 pa, particularly when taking into account the cost of repairs and general maintenance is more than reasonable, and should not discourage any prospective buyer.