New build apartment - need advice

[Gifgaf]

We are FTB and after lots of research and viewings we have come across an actual dream home located in a perfect location. The new build is very lux in every aspect with 24/7 conceriage and blue chip businesses below and private podium and winter gardens etc. The apartment we want is on high demand because there is not enough 3x beds in the building.

However, we are super uncertain and split on what to do because we are hearing horror stories of service charge increases and people being presented with large bills that they can't afford.

What are people's experience with new builds and does it make much of a difference in having a super lux one compared to maybe an average one in terms of service charge and building works etc.?

On the contrary, me and DH have a house each to our name (selling them is out of the question ) and we are in a financially stable position as we are but it is now way too small for our family and should we decide to take this new build, we will more likely be very difference financial position and will have to be extremely conservative on our spending and constant budgeting.

I am really looking for valuable advise, authentic experiences and opinions.

It's a huge decision and I am worried about making the wrong one especially have small children.

How on earth are you managing to go from renting a small HA property to buying an expensive luxury flat?

Sounds like you didn’t need an HA property (let alone two) in the first place.

I'd prefer a house but flats are cheaper and this flat also had a small park just for residents as a "win".

Rent is not cheap here either but we have fortunately worked really hard in the last few years to get ourselves in a better position to he able to potentially move out and get something bigger.

I have read about this also which is another worry over time

Service charges on luxury will be more than normal because it’s luxury and they will make it harder to sell

i would be squashing into something smaller

I thought quite the opposite because of the location and the number of rooms it may be easier to sell IF anything but you make a good point

Give up one of the HA houses now and you'll be able to save those costs . So in a few years you'll be able to buy something else. I don't know why you didn't do this to begin with, when you both knew you wanted children together. I wouldn't consider a flat with £500 per month charges - only
one way those charges will go and it isn't down.

From another angle, you'll have no real neighbours if the other flats are sold to landlords for short term/holiday lets which sounds a possibility for such a good location.

Would you actually regularly use all the amenities on offer?

You mentioned there’s a gym and swimming pool. If you currently swim & go to the gym frequently that could work out cheaper. However I would guess that swimming pool and gym maintenance costs will not come cheap and the service charge will reflect that.

Is the 24/7 concierge service something you’d actually use? For that level of service there’ll be more than one concierge salary to pay each year, plus employers NIC & taxes which will all come out of the service charge.

Do you know how many flats there are in total at the development? If there’s a lot that will be more people paying in to the service charge but also more people in the pool and gym when you want to use it.

Walk away
my son was in a rented luxury flat
has beautiful grounds lake gym pool 24/7 security

when he lived there the residents were paying 2.5 a year in service charges
in the 18 months he lived there it went from1800 - 2.5 a year

its now 4k and he only moved out in Feb last year so it went up

as soon as the build is finished the service charge will go up probably

you have no control over this unless you and all your neighbours do a right to manage

Well we initially wanted to look to buy but one of them we can't buy because they don't allow it and the other we can but it's also an apartment so we're two minded now. However, regardless they will still be gone once a mortgage is being made.

Get a less luxury abode.

If I am paying for it then I probably would use them. There are roughly 3 building in that spot and in the building we were looking it's 8 other apartments above. But the other two have a lot more so I am not sure in total but they are still being built

This is also a good point.

Do you know if the leases allow air bnb?

If so, you could find yourself living next door to one with new people every week, possibly having wild parties etc.

This was the only 3 bed we happen to come across in the location we were looking for work.

I doubt they will allow air BnB so not sure but that's a good point also

Maybe consider moving out a short distance to somewhere with good transport? That new block sounds like a recipe for financial stress in the next year or two, and may be impossible to sell. Is the risk worth it?

That's what's so annoying why service charges is unregulated and uncapped. I was worried I may be going in with an emotional decision and fascinated by the amenities and design but not making a logical decision for the long term.

Also I think 500 pm is incredibly low for what you're getting and I think that it will go up substantially. So you might struggle to pay it yourselves and then find it difficult to sell on.

Service charges are regulated, but costs are increasing. For instance, the cost of insurance has gone up a lot in recent years, and fewer insurance companies will agree to insure blocks of flats, especially if they are over a certain height, so it’s harder to get a good deal.

Also, contracts for gardening and swimming pool maintenance etc will increase as the companies put their costs up each year.

If you’re paying for a lot of things and they are all increasing then the service charge will also go up.

There’s an increasing number of inspections etc for lifts, fire safety equipment, even children’s play equipment if there is any in the grounds. All these have to be done regularly by qualified people so are not usually cheap.

If a service charge was capped it would just mean there would be less money available for maintenance and repairs, so you’d find the pool or gym closed more often until there were funds for repairs / maintenance, or the gardens would look overgrown & messy due to having the gardeners in for fewer hours. All this would make it much less nice to live in and a lot harder to sell.

I would not buy one. Apartments are fine for renting, not for owning. It’s common knowledge you will pay a premium for a new build, that is immediately lost because then its second hand (like a car), and also while houses have gone up in value, apartments have not.
As per PP’s, move further out and get a house if you can.

The service charges on these are usually worked out as per sq foot. If you have a 3 bed you are going to be paying the highest service charge in the building.

It will be low at the moment because you are just paying for facilities and everything is new, once the building starts to need maintenance then it will go up. Often these places have cycles of work to keep everything looking smart whether you think it needs it or not.

For reference I lived in a gated development with concierge and gardens and my service charge was 6k a year. Others were paying as much as 9k.

Anything with service charges is to be avoided. Y do not know what will happen with them, but they sure as eggs won't go down. So it becomes impossible to budget.

You can’t get a flat without a service charge except where the block is badly mismanaged and random bills arrive (and there is no sinking fund so the person owning at the time of the bill pays the lot).

However, there are ways for the flat owners to control them. In my first flat, I owned a share of freehold, in the second the leaseholders control the management company (it’s in the original leasehold documents).

Both ways, the people paying are the ones who set the amounts. I get nicely maintained gardens and cleaning / maintenance of the communal areas plus a sinking fund for about £180 a month. I doubt I’d be paying less in a house.

That doesn’t seem to be the case in the block the OP is looking at. Staff are always expensive - a 24 hour concierge isn’t cheap - and gym / swimming pool costs are likely to be astronomical. Just the cost of heating the pool is likely to be high.

I had a flat with share of freehold and the owners controlled the spend. It didn’t keep costs reasonable though.

Some people were retired and enjoyed managing projects so there was always something they wanted to spend money on, others wanted to use service charge to improve facilities whereas others wanted to maintain the level.

The conflicting priorities of residents meant those with the loudest (poshest) voices got their way. You don’t get a veto on spend as a freeholder, if the majority want to do something then you have to do it.