Good afternoon and thankyou for your time! I am looking at a flat to BTL in the somerset area (divided into 4 its a freehold with 25% split per owner )
The Management fee is £750 and ground rent £100 so about £70 per month.
I actually spoke to the guy who manages the lease on a voluntary basis and he seemed fair.
My question is do you think this is fair ? I supposes being on a 25% stake I would get some say if I wanted to.
I do understand there are more costs than you think especially when the vat is added also he said there are some spare/surplus funds in the account.
Thank you for your time!
I have tried to think of some of the charges below:-
Worth checking the lease actually allows subletting and if there is any fee for permission from the freeholder to do so.
Hard to know what is a fair price without knowing location and what it actually includes (buildings insurance? What else? ) and size of property. A large common garden area needs more maintenance than a small one. Etc.
A ‘fair’ price is whatever someone is willing to pay.
Typically if service charges are more than 1% or 2% of the property value, you may find some lenders consider it onerous and will not lend - irrespective of your ability to afford it. They view the property with a high SC as harder to sell if it was needed.
I have 1 bed flats as RTM or share of freehold or leasehold, my contribution to the buildings insurance is a little over 400 pa for each. On some the other additional costs are on an adhoc basic and there is no sinking/reserve fund (one i will have to pay a share for a new roof this year..).on others there are service charges for the sort of things you list.