Property Service Charges In England
There are numerous service charges that are associated with owning a leasehold 1-bed, 2-bed or 3-bed flat…
Everyone knows that when you buy an apartment or even a few specific housing scheme developments, there is usually a quarterly annual payment made to the managing agents or freeholders.
A service charge is a charge that is usually taken quarterly by the freeholder.
This charge will go towards aspects such as:
The maintenance and upkeep of a lift,
Upgrading communal areas,
Maintaining well kept communal gardens,
The porter and concierge, etc…
Service charges have become more expensive as developers in prime central London (PCL) are having to develop and build more exclusive buildings with increasingly exclusive amenities…
At the high end of the market, in buildings such as One Hyde Park in Knightsbridge and similar buildings across PCL, the service charges typically range from £15 to £25+ per sq. ft.
These buildings are like hotels…
They are beautiful and the lifestyle, if it fits your needs, can be as luxurious as anywhere world-class hotel in the world…
They can often include:
Gyms,
Spas,
Cinemas,
Business and resident lounges,
Swimming pools,
Libraries, etc…
Alongside these and many more amenities, the front desk concierge can arrange security and you can live very much like you are in a hotel with room service and laundry arranged for you if and when needed.
With these new build flats, service charges can be incredibly high, seeing as a buyer may pay £2,500,000 for a 1-bed flat.
“These buildings are like hotels.”
At the other end of the scale, townhouses and houses that have been previously converted into 1-bed, 2-bed or 3-bed flats typically have the lowest service charges.
The service charges in buildings and flats such as these (with no gym, pool, concierge, porter, etc…) carry a much lower price per sq ft service charge.
It is really important to spend a serious amount of time working out the way that you would like to live your life.
If you would like to live like you are in a world-class hotel, then a higher service charge could (and I mean ‘could’ because it’s down to the individual) make more sense…
I would strictly avoid flats where you feel that the freeholder is looking to charge an extortionate amount for what they are offering.
It’s simply not worth it!
Remember that service charges can be uncapped, meaning that they can increase at any time.
Always take into account the service charges into the annual affordability of what you can afford.
Include it alongside mortgage costs or on top of the purchase price if you are a cash buyer.
Have you ever looked into buying a 1-bed, 2-bed or 3-bed flat and realised that the service charges are far more than you thought that they would be?