Service charges on flats, how are they so high?

Dano

Dano

Dano

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Just looking around at what is for sale locally and this flat popped up, seemed cheap for the area and no wonder with an eye watering annual service charge of £11,404.80 :eek: still, at least the ground rent at £40 for the year is reasonable I guess...

www.rightmove.co.uk

Check out this 2 bedroom apartment for sale on Rightmove

2 bedroom apartment for sale in Swan Street, Petersfield, GU32 for £250,000. Marketed by Henry Adams, Petersfield
www.rightmove.co.uk www.rightmove.co.uk

48 Flats (I checked how many) at £11404.80 a year, £547,430.40 a year in service charges assuming they are all the same, somebody living the high life off of that, no idea how much it costs to maintain a large block of flats like that but it can't be anywhere near what the service charges total can it? Maybe I'm completely out of touch with maintenance costs lol...
 
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IIRC they have to be justified but are able to build a pot of cash for future expenditures. I don't know if charging outrageous amounts from external maintenance companies was allowed. I did look into all of this years ago when wanting to buy a flat.

I think part of it is naivety and just laziness from the owners. Young lad at work consistently moaning about the cost but still won't write a request for a copy of what they're paying for.
 
I've seen a building down the coast with charges in that region. In many cases it means the maintenance charges are 10% of the value of the flat per year!

www.rightmove.co.uk

Check out this 1 bedroom flat for sale on Rightmove

1 bedroom flat for sale in Marine Court, St. Leonards-On-Sea, TN38 for £75,000. Marketed by PCM Estate Agents, Hastings
www.rightmove.co.uk www.rightmove.co.uk

This one is £4700/ 6 months (inc hot water). I think the building needs significant work doing to it.
 
Typical scummy behaviour of people doing it because they can. It is funny how many of these places need a regular full roof rebuild at costs into the 100s of thousands... sadly yet another thing which needs a raft of robust regulations.
 
Having a quick look around the area other flats are a more reasonable £400/year through to £1300 approx for service charge and around £200/year ground rent. One of the related ones is £1920 but 0 ground rent.
 
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I imagine as above it's to build up a surplus. I imagine the risk of some renovation works being needed at a cost of hundreds of thousands/millions in the future isn't unheard of on buildings like this.

>£11k a year does seem hefty though. Maybe they've just had some major works done and need to build up a buffer.

Definitely a reason i wouldn't want to live in a flat though.
 
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All sorts of stupid things. The biggest costs tend to be landscaping, if applicable, roads and exterior maintenance. If a block of flats need a new roof, it's going to cost a hell of a lot and it's better to put away money up front than to suddenly hit everyone for tens of thousands in a single year.

I agree though, it was one of the main reasons I got out of my flat at the first opportunity I could.
 
Jim99 said:
All sorts of stupid things. The biggest costs tend to be landscaping, if applicable, roads and exterior maintenance. If a block of flats need a new roof, it's going to cost a hell of a lot and it's better to put away money up front than to suddenly hit everyone for tens of thousands in a single year.
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Can't be that much.
where I live they do all the above and the service charges in my rent are tiny.


part of the roof blew off during a storm the other year, their were huge chunks of insulation that had landed in the car park, they never put anyone's rent up when they fixed it.

9-5 there's usually 2-4 janitors or whatever you call them roaming around doing all their tasks


I bet the blocks with these 11k service charges you barely ever see any staff
 
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Dunno anything about what the actually costs are but:

1) pub liability insurance for the common areas is likely expensive.
2) If there are lifts, then the service charge for them can get expensive.
3) Does the contract say that the external of the flats will be repainted every X years ?
 
arknor said:
Can't be that much.
where I live they do all the above and the service charges in my rent are tiny.


part of the roof blew off during a storm the other year, their were huge chunks of insulation that had landed in the car park, they never put anyone's rent up when they fixed it.

9-5 there's usually 2-4 janitors or whatever you call them roaming around doing all their tasks


I bet the blocks with these 11k service charges you barely ever see any staff
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Yeah, I'd definitely want to be leafing through the accounts to see where it's all going.

Although at this level I just wouldn't be bothering in the first place.
 
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The lease information has been removed from the listing, like most issues on a property it's probably the estate agent publishing the wrong information.
 
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