Is that flat in sw london a good purchase?

[paige8039]

The price is £215,000, 87 year lease, £1400 service charge, £800 reserve fund, £200 ground rent, communal gardens and a parking space, its a 1 bed ground floor flat in small block of 12. Location is streatham hill.

Both my children have bought flats in the last few years and I advised them not to buy anything with a short lease. 87 years is definitely too short in my view.

In both cases they bought flats where they had 900+ year leases with a share of the freehold.

The service charge and ground rent sound reasonable, but I don’t understand about the reserve fund. Would you have to pay an extra £800 a year for that? If so, that’s quite a lot I’d say (my children pay around £1400 service charge with no ground rent and no separate payment into the reserve fund).

Does it say if the service charge goes up by a percentage each year?

A colleague of mine bought a flat 5 years ago. The service charge is now 5k a year. It increases each year. She’s trying to sell and it’s putting people off.

87 year lease is far too short in my opinion. Unless you can come up with a deal to extend it quickly and maybe take that into account with the purchase price if it isn’t already?

Ask current owner to get lease extension as condition of sale since current owner can request easily. The costs can be factored in. There is a way to complete lease extension on same day as sale.

Sounds like a good price to me

But you'll need to extend the lease and I don't know how much that will be

I presume the price is accounted for the fact that buyers are likely to want to extend the lease

In a small block, you might have the option for buying the freehold. Do you know who the freeholder is at the moment?

The service charge will almost certainly go up. Do you know what's included in that price? Don't forget insurance will go up every year as well.