How much service charge is too much?

[Anotheremptynester]

I really want to move into a flat from a house, no garden and good security. But If you live inLondon the service charges seem to be crazy high. So far we have seen prices from 6k to 15k in zone 3. The flats are nice but I am worried I am just throwing money away and as it rises we might not be able to afford it and be stuck in selling it.

am I just out of touch? Or too poor!

What is your budget?

I agree the service charges are like a second mortgage.

Two alternatives:

• A share of freehold on a house split up into flats - you will have some shared costs but they tend to be lower
• You could opt for a small terrace with yard instead. Those without much outdoor space tend to be less attractive so you might get a good price.

From those levels, I assume you are looking at the sort of developments with facilities like residents gym, residents garden, resident tv screen room...?

I know someone in a development with a (nice) gym, swimming pool, shared co-working office spaces, garden, roof terrace, concierge taking in your deliveries, small studio you can rent for a night if you have guests,.secure parking etc. the service charge is over 12k but then it effectively includes your gym cost and desk space etc so no surprising it's high. The cost of maintaining those facilities is high.

But if you mean a big Victorian house split into four flats with no shared facilities then I'd expect something less than 1k.

It depends on the services, age of the block and your expectations etc..

Ones you quote seem pretty high.

I live in a thirties block in zone 3 and I pay £2.9k a year service charge. That includes -insurance, communal electricity, cleaning of communal areas (we have a caretaker who comes in four days a week), small running repairs, gardening, management fees ( we employ a block manager) and a contribution to a sinking fund for major repairs.

We are not a pristine block and sometimes non urgent repairs take a little longer while money is saved, but we are generally happy with this (we are a resident owned freehold).

We were in a flat in zone 2 until last year. Service charge was £3.5k a year…except when major works were needed and the bill jumped up massively. Those works were a one off because of where we lived, but that is something to be aware of - unexpected repair bills.

Also in a thirties block in zone 3 where residents own the freehold.

Service charge is 2k.

A 1985 block in zone 3 - only 3 stories high so no lift. 28 flats.

Around £1500 per annum. We own the freehold and employ someone to manage it.

If I moved to somewhere with a lift and car club and concierge and co working space and gym it would be far more.

Interesting. These are 30s blocks with porter and gardens but no gym sadly.

Oh and we built a reserve in for regular repairs into the annual charge. Ie painting internal every 5 years and doing externals windows /check guttering every 7.

So no huge unexpected costs.

Do you have any green space that needs tending? This seems nice and cheap, dare I ask where you are?

A porter seems an extravagance in this age of electronic door entry systems.

That would add at least £40k annually to the over all service chaege.

Mine is £2500 pa, share of freehold so no ground rent. It’s a Regency conversion, 5 flats. Includes buildings insurance, all regular maintenance, fire safety checks etc and a contribution to a reserve fund for major works. We pay an agent to manage it so it also includes their fee. It went up by £400 last year due to insurance and the new fire regulations but we’ve just had the budget for next year and it’s stayed the same.

I live in a 3 bed mansion block flat (1910) in zone 3, service charges are around £2.5k pa . There is a porter and a small but beautifully maintained communal garden. It's share of the freehold so managed by an excellent company & the residents committee. A couple of good gyms nearby (plus daily cycles along the river!) so no need for the extra fees for that you'd pay for a modern apartment block.

Sounds perfect! Is it south of the river. Finding something like that with 3 beds in nw london is like searching for gold dust.

I'm in a Z3 early 00s block and pay £2.5k a year - it's a well maintained block with monthly gardeners and window cleaning, weekly cleaner for internal areas and has a lift and electric roller access car park which I believe require fairly regular maintenance. Plus it covers the usual insurances, fire safety stuff, reserve fund contribution etc.

The extortionate sums I've seen around London are all in high end blocks with gyms, concierge etc. You should obtain the accounts during the conveyancing process to understand where the money is being spent.

I'm in a zone 2 Victorian conversion – about two thirds of the house. I pay around £700 per year (for a long time it was just £450 but it's gone up in the last few years) and £10 ground rent.

My service charges are double what they were five years ago. A combination of things getting more expensive and cladding, insurance and fire issues across the industry.

We were in a mansion block, 3 bed flat in zone 2/3 until April. Communal garden and a caretaker. It was just over 5k in the end. It jumped up massively in 2023.
All mansion blocks around my area were between between 3.5 and 6 for 2/3 bed flats.
A friend of mine is renting a studio flat in one of the new builds on Hammersmith riverside. She said her neighbours in a 3bed are paying 12k service charge a year🫠🫣

Insurance and fire safety stuff has increased charges that is true.

I owned a leasehold flat in London with out a concierge service/shared gym etc so service charges were much lower but would never do this again.

We got stung not once but twice in 5 years with massive repair bills ('major works'). The managing agents were rubbish and the freeholder was worth hundreds of millions. We sold up as the lease was going to need renewing too.

As others have posted, I would aim for a share of the freehold and managing agents appointed by the property owners.

(Also check carefully for noise issues, especially in a converted building.)

Yes there is a communal garden. We are in finchley.

That sounds amazing. The ones in Putney are about 8k for the same. Where are you??

If you want reasonable service charges, look for a block with no lift and no full time employees eg porter.

Anything over 6 floors is now classified as high rise and there are so many additional costs associated to health and safety.

Somewhere from around £2k to £5k is pretty standard for most situations.

Even low rise are caught by stiff.

We (3 floors no lift) have to make all communal doors fire proof (fair enough)

Bit also replace every single flat door leading into the communal area (at flat owners own cost) which if we don't do it (as freeholders) we'll be in legal trouble.

So basically legal hassle and cost to enforce all this onto all flats.