New build/leasehold and high service charges etc

[Wishiknewthen]

Hi there,
Just wondered if anyone has bought a new build leasehold property or lives in a leasehold flat and is shocked at the ridiculously high service charges (often for little to show for it). Service charges..ground rent demands..permission fees..
We bought a home - or so we thought - but we don't really own it!

Well too late now but didn’t your lawyer provide you with accounts? It should have specified what the service charge is for etc. If not you are by right allowed to ask for an itemised account from the freeholder/managing agents.

we looked at a new build recentlty (freehold house on a new development) and yes theres a service charge! Now I`d been reading about these prior to visiting the marketing suite etc , so I knew about them on some developments (persimmon, barrat etc).

We arrived looked around....loved the place. Went to see the sales woman etc. Until I actually brought the service charge thing up, they were NEVER going to have even mentioned it. google it....I have not read a single positive thing about it yet.

After that I wasn`t interested. On any new(ish) build its my first question now. Its written legally in the deeds, so you are at the mercy of the company, not regulated especially freehold! so £10 a month this year.....£30 next who knows?

I`d walk away

did you not realise the lease hold "thing" OP? Id not touch a leasehold.

If you're buying a flat it is almost always leasehold, sometimes share of freehold. No house should be leasehold. I'd steer clear and only buy freehold if I was buying a house.

Too many newbuild houses are LH now - it's just a money making dodge - ground rents being whacked up regularly - and it's high time the govt. cracked right down.

Best thing is to avoid like the plague.

Flats in blocks, whether new or not, often have very high service, and the more facilities - lifts, gym, concierge, etc. - the higher they're going to be.

If you do need to buy a flat, period conversions - i.e. not in a block - are usually much cheaper from a maintenance/ground rent point of view.

But all these things should absolutely be checked on and made crystal clear before anyone signs on the dotted line.

Yeah. I looked at lots of (not especially amazing) flats with service charges of 4.5k a year with not even any fancy facilities. Crazy.

I went for freehold in a worse location.

You can challenge the service charge if you think it's too high.
How does it compare to the estimates you were given?

It really depends on what you get for it tbh. We pay a high service charge (about £300 p/m) but it doesn't seem awful as our development is kept immaculate, gardens and parks are lovely and litter free, we have a 24h concierge which does a lot for us (holds keys for guests, accepts parcels etc), window cleaning every 2 or 3 months, and that includes a sink-in fund for work (we're in a grade 2 listed building so needs expensive maintenance). We are also on private roads so have a separate company who deals with rubbish collection and parking etc. Our development is charged a price per sq/m based on the floor space of your flat, and we have a large apartment and a parking space. It's not ideal but at least we can see where the money goes.
When we were looking to buy there was an apartment we viewed which had a roughly £180 p/m service charge for no obvious services. No concierge, very small outside space to maintain (which looked awful, full of rubbish), walls in the hallways were full of scuff marks and the whole building had a vague air of neglect. There was no way in hell we would have gone with that place.

Leaseholds have been clamped down on recently (not as bad as the ones pre-2015ish. But I wouldn't touch lease hold with a barge pole. They're never good - even if they're with the national trust! They'll wait until near end of lease and buy back as low as possible (compulsory purchase). Flats are slightly different.

Service charges: we have one, whilst the development is still in progress it's to cover the gardeners etc for the community spaces. Ours is ~£40pcm. Once the development is complete it will be the responsibility of a residents committee, who will negotiate contractors etc to do the work then that's what the service charge will be based off. Again if the residents weren't going to control this I wouldn't have gone for the development. So read the t&c carefully. Are the developers giving it to the residents or are they selling it off?