Owning your own home

2 bed flat for £850k though

Zone two I guess. God knows what the services charges and other shiz are.

Don't buy new flats.

Buy old ones that you already know are fucked.

2 bed flat for £850k though

Was thinking that, and in 2019. If it wasn't falling down it would be £900k by now. It's not even that nice! Mad mad

HM and IR apparently, but the HM has been over over valued for a while so its a when and not if.

Mid way through a flat purchase in London and have kind of gotten cold feet while reviewing the terms of the ground rent and also service charges.

First up both are more than what we were initially told by the estate agent. Ground rent is £475pa, we were told £425pa, and service for the last year is £3200+, we were told it was around £2000pa. Realistically we can afford it but it really adds to our monthly outgoings.

Going the quick maths on the ground rent which is to increase every 10yrs in-line with RPI, that sets us up for an increase in 5yrs time. Using todays RPI we are already looking at a 35% increase with 5yrs of future RPI to add on top of that. Go ground rent will be above £650pa in 5yrs time.

How scared should we be and is this just the reality of buying a flat built in the last 5yrs? I’m worried I’m gunna get fucked over when it comes to selling.

£3.2k a month!? Is there a gym?

Per year, which is a little higher than expected about £266+/months.

That’s £3.2k per year!

Block of 17 flats, no gym or concierge, just a lift which has apparently been causing some issues…

Woops.

Currently it is unfortunately the reality of newer flats, but hopefully there will be some reform in the future, particularly around ground rent.

It's worth checking if buildings insurance is included in the service charge as that was separate in my old flat and added another £3-500 per year onto our totals, i think we were paying about 3.5k per year for ground rent, service charge and buildings insurance.

Also get an idea on upcoming works as that could further skew service charges. How is it on flammable cladding/ESW1?

Lots of management/lease stuff going on in government at the moment all in favour of the homeowners.

Renegotiate your offer

Building insurance is included in the service charge which is good.

@EstelleGetty from what I’ve told the lift getting repaired has contributed to the increases. The building is only 5yrs old so we’d be hoping anything major would be covered by the building warranty. There is currently no sink fund so we are at risk of something unexpected. No issues with cladding.

Solicitor gave his honest opinion saying that he felt that it wasn’t a good investment, I think this is mainly from the point of view of it being potentially hard to sell in the future. Mainly due to new flats now all having 0 ground rent.

Really tricky spot, the thought of pulling out and finding somewhere new to rent in the current market is scary too haha

There will always be demand for flats in London as they are the only thing 'affordable', everyone who buys one will go though this thought process, including whoever you end up selling to in the future (if you move again).

Agree. And bear in mind that things like Right To Manage - where you take over management of the block from the current MAs if you feel like you're not getting value for money - are getting easier and simpler all the time. You can also extend your lease to rid yourself of ground rent. Flats are harder to sell than houses, because there's a third party involved, but you can still sell them, and for more than you'd get simply with a returned deposit on an AST.

Ymmv of course but for me leasehold was my route out of renting and despite all the headaches I've had I would never go back.

The service charges thing is becoming a racket. That's a joke.

Thanks for the advice all, feel like it’s been good to get some outsider thoughts.

Think we are going to continue forward, but also see if we can get some money off the asking for the misleading figures.

All this really depends on how much the flat is, how much it would rent out for if the shit hit the fan and you couldn't sell, how much your mortgage interest will be Vs renting blah blah blah blah blah

Yeah it has a high service charge - vast majority of flats in z1/z2/z3 do. And it will never go down and only ever go up.

Most service charges includes water and gas don’t they?

I really wouldnt want to be paying almost 300 a month in service charges ontop of ever rising council tax and energy prices, by the time you're mortgage free your monthly outgoings, just for accommodation, would still be over a grand

Yeah the thing is service charges are expensive, but so is renting an extra few months if you back out/it falls through.

To my knowledge they dont, but maybe it works different down in England.

Not normally.

Mine doesn't.

Maybe it's so high because they're contributing extra to repair the lift or something. Should be easy enough to get the finances to see what the money is going to.