Service charge in Chiswick purpose built flats(17 Posts)
Would really appreciate it if anyone can help me with a conundrum I face.
My partner and I are trying to buy a flat in Chiswick. We saw one we like recently - just off the Turnham Green Common, close to the high street and in the Belmont catchment area. However, the building comes with a whopping service charge of close to 4000 pounds/year - which includes heating, hot water, communal gardens, parking, building maintenance, concierge. Trying to figure out how reasonable this is and how much of a stumbling block will this be, if I try to sell the flat again in a few years time.
We were avoiding new developments during our search for this very reason, but the flat ticks so many other boxes re: location and school (I'm aware there's no guarantee our DD will get in but nonetheless), that we are considering this now.
Would much appreciate any opinion or advice.
Service charges are standard in communal blocks - and are high when the services you mention are offered. Obviously, the amount is set by the level of luxury and the size of the flat.
Ask about how the block is managed, and how the operating budget is set each year. I'd also want to know if there is a fund accruing for any long-term large repairs (roof, lifts, etc) and how/if that is added to each year. If a block is not managed properly, residents can be assessed. You also should take a look at the rules and regulations for residents in the block - just to ensure you are fine with them.
Appreciate your response Earlybird.
Seems that there is a sinking fund which is being used for a once in 7 years outer maintenance that is going on at the moment. I asked the EA if there are any service charge increases scheduled in the next few years - they claim they spoke to the managing agent and it isn't.
Anyways, a concern I have is that I might have a problem selling it when moving on eventually because of the high service charge. Is that a valid concern?
Apologies for the silly questions - FTB syndrome in full swing
Not a silly question at all.
People who buy in these sorts of blocks are accustomed to paying a service charge, so won't flinch (many are foreign owners/investors, people who aren't full time residents and want a London base, etc). You would be wise though to look into how it compares to similar blocks in the area - presumably it will be right in line, but always good to check.
Is the flat leasehold or freehold? If leasehold, do you know how much the ground rent is per year?
One final thing to check: sometimes these newer blocks are not well insulated for sound. Make sure you won't be able to hear your neighbours' phone ring, or won't be driven mad by the occupants above walking 'round on a wooden floor.
That sounds pretty standard for the sort of services they offer - I bought a flat last year in a less swanky area and without concierge or parking or heating and the service charge was still almost 2k a year... I think it is important to check that there is some sort of cap in place for charges - ie the developer can't keep increasing the amount above a certain amount each year.
it's not out of the realms of ordinary - my mother pays a little more but her building has a gym and pool plus gardens to deal with as well. It all depends on who the freeholder is and what the management charges are within that as to whether it's reasonable. have you got a copy of the past few years' accounts to ensure that it's properly managed and they won't be calling for an overage when the main works are carried out.
We pay about £1000 and there are only 8 flats in our block and nout fancy at all.
You could ask to see the accounts to see what is being charged for and if that is reasonable. A bit hard to tell otherwise.
How much do you pay for water at the moment and heating? I bet that is a large chunk of the service charge.
As the service charge includes heating and hot water it seems reasonable. Is the Consierge 12 hrs or 24hrs?
where I lived in Maida Vale there are buildings where the freehold is owned by management companies who are professional landlords and own a voting control number of flats. they charge huge management fees so despite annual fees of £5k or thereabouts, there have been calls for £14k per flat when works are done etc - it's made a lot of flats in lovely blocks very difficult indeed to sell. Do your homework on who the freeholder is and what their relationship to the management company is.
We have a share of freehold on our flat. About 300 grade 2 listed flats, mostly foreign owned or London crash pads and a few owner occupiers. No gym. No gardens. Underground car parking. Our service charge doesn't include heating or water. It comes in at around 3k, it doesn't put people off buying property here. Flats for sale rarely last more than a couple of weeks before being snapped up.
OP, if you decide to buy, please don't rely on a verbal reassurance from your EA that there are no increases planned for the service charges. In the pre-contract enquiries that are issued by solicitors, there is normally a question to the effect of 'Are there any significant increases expected on s/charges in the next 3 years'. If there are any major works planned or any hikes because the cost of say, maintaining the lift, have gone up, the managing agents should disclose at this point.
If heating and hot water is included in your service charge, that means there is a communal boiler or similar. This can be a very expensive and unpredictable piece of equipment to maintain, so I'd ask some more extensive questions about that, e.g. exactly what type of system is it, how old is it, have there been any significant works carried out on it in the last 3 years (which might indicate that the system is troublesome or on its' last legs). I'd also triple check whether the EA's interpretation of heating & hot water being 'included' definitely means the cost of any heating etc. actually consumed by each apartment, not just the cost of maintaining the heating system.
Finally, see if you can obtain a copy of the last 3 years' audited accounts/financial statements. These are normally given to solicitors post exchange as part of the pre-contract enquiries, but if you can review them beforehand, these will give a good idea of how well the managing agents are budgeting for and managing expenditure.
Thank you so much for your kind responses. You gave me a lot of very important points to consider. Really appreciate that.
I tried to follow-up on them when the EA notified me that the vendor has decided not to sell - which sucks as we had started getting our hearts set on the area. Fwiw, the EA thinks the market should pick up from now - would love to wrap something up soon.
We saw another flat which though smaller was nice, but in the catchment for the William Hogarth school which we don't seem to be hearing great things about (please don't take offence if your child goes there - just recounting what we've heard).
Chiswick is a lovely place to live, especially around Turnham Green. hope you find somewhere there soon x
(though don't, as I did, completely dismiss Ealing out of hand without looking at it and end up in the country instead...)
Thank you EasterHoliday. Appreciate that. We actually like Ealing too - looked there briefly. But like Chiswick more, so concentrating on Chiswick for now.
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