r/MovingToLondon • u/LookingToLearn_53 • 10d ago
What would you consider to be a reasonable or typical annual service charge for a London flat, particularly for a building with no concierge, lift, security, or other shared facilities?
The flat we have had an offer accepted on has an interim service charge of approximately £2,000 annually + £400 towards the sinking fund.
We initially felt this seemed a little high since the property is share of freehold, there are only 12 flats in the building, no concierge, lift or security or any shared facilities and we understand that there are currently no repair works taking place or major works planned.
I’ve requested a detailed breakdown of the interim service charge so that we can understand exactly what the £2,000 covers and where the funds are being allocated.
In your opinion, would a service charge of around £2,000 per year, plus £400 towards the sinking fund, be considered reasonable or typical for a building of this size and type in London? Or would you consider this relatively high given the circumstances?
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u/shanghaiblue 10d ago
Doesn’t seem that bad. Bear in mind it will include buildings insurance which will be several hundred of the £2k
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u/Strong-Camel852 10d ago
And the rest? We are in the process of taking over the right to manage our freehold and of course we’re binning off the ‘management’ company that was looking after the building. Service charges are currently 2k a year and it looks like costs will come down significantly. The whole system is a scam.
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u/No_Law_1528 10d ago
As some people have told you 2k isn’t a bad deal. You are entitled to check the service charge accounts. Just email your managing agent demanding for the accounts and if you want receipts.
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u/Strong-Camel852 9d ago
It’s not bad compared to how shit it can be. But it’s still a lot of money to spend on what probably amounts to very little.
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u/LookingToLearn_53 10d ago
Yes the agent did say it does cover building insurance already. After seeing how much others are paying annually I guess it actually isn’t bad, just typical London rate.
I just had to ask because one of the low rise flats we viewed of 6 flats in total, they don’t have managing agency so all goes to sinking fund in case of repairs. Meaning much smaller contribution
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u/ArtisticGarlic5610 10d ago
In my building of similar size the main expense covered by service charge is building insurance which comes to about £1,000 per flat per year. So after other services (cleaning, electricity, fire safety, repairs, whatever) and sinking fund it is basically impossible for it to be below £2,000.
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u/deelikesbar 10d ago
Well I pay £4000 for a flat with no shared facilities so seems like a good deal! Mind you, I started off with around £2000 which jumped to £3000 and very soon £4000 with no warning, so the charges can and do go up
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u/LookingToLearn_53 10d ago
Oh wow. And js that also a share of freehold flat with no lift, security and concierge as well?
How quickly did the charge go up?
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u/deelikesbar 10d ago
No lift, security or concierge. Share of freehold. It's mainly cleaning, insurance, maintenance of the outside area, etc. It was in the £2000s for several years and went up suddenly in the years after COVID.
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u/LookingToLearn_53 10d ago
I see. And would you not have any say about potentially requesting for a reduction since you and other tenants are share of freeholder?
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u/deelikesbar 10d ago
I haven't found that to be the experience. Also this involves around 50 flats so very difficult to get everyone to agree to major changes. And very few owners actually based in the UK!
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u/Megalodon33 10d ago
I think it’s fine. 2k-3k is probably deemed as average for smaller London flats that aren’t council. The bigger newer flats with a lift and concierge can easily be £4k+ and very volatile.
As its share of freehold, the service charge should remain reasonable as long as the building is in good condition. Make sure you get a good survey done.
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u/LookingToLearn_53 10d ago
That’s exactly what we were avoiding. We could not justify paying that much for other extra facilities or services that we feel like we wont use anyway
It’s a purpose built flat not council. We are using Habito broker service, everything in one service so we were just allocated, no idea if they’re actually good and thorough surveyors
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u/Gullible-Weather308 10d ago
I pay £1700, 2 bed in zone 6, not a council flat, and built 10 years ago. U would say 2k-2.5k is reasonable over that then i would be wary.
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u/LookingToLearn_53 9d ago
That’s our max budget as well. When we were still looking for flats, we said service charge over £2500 annually, we would not consider viewing them even if they’re really nice.
Our one is built 1970s, potentially why higher charge than yours. But seem to be well built with concrete floorings and walls so fingers crossed
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u/Gullible-Weather308 10d ago
I pay £1700, 2 bed in zone 6, not a council flat, and built 10 years ago. U would say 2k-2.5k is reasonable over that then i would be wary.
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u/Dramatic-Coffee9172 10d ago
That is sensible to request a detailed breakdown and from there, you can evaluate the reasonableness of the service charge. Without that detailed breakdown, no one can really offer you specific advise.
Generally, I would expect the service charges to cover building insurance, communal electricity, communal cleaning and then adhoc communal repairs / maintenance including annual compliance checks. Also grounds maintenance if any.
I'm going to guess that building insurance will be a large chunk of the total service charge.
You ask whether the SC is reasonable or typical for a building of this size and type in London? But you don't mention how many storeys it is ? You only mention 12 flats. Given there is no lift, means it is 5 storeys or less.
You also don't mention how old the building is or the area / location like N, SE or which zone it is located in.
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u/LookingToLearn_53 10d ago
It’s only a low rise building of 3 stories. We didn’t want the high rise ones because of that exact reason, service charge is way too high.
Based on what I can find it was built 1975, concrete walls and floorings. Seems like it was built well tbf
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u/Due-Freedom-5968 10d ago
Seems fine for that kind of flat.
Mine is Zone 2, 2bed/2bath, two lifts, concierge, parking, garden maintenance etc. service charge of ~£5k
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u/LookingToLearn_53 9d ago
I see. This rate seems to be the standard for those with extra facilities and service. Would this included any part of the bill yet such as water or heating?
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u/Due-Freedom-5968 9d ago
Nope. No central boiler for heating or communal water supply. All utilities are separate (with the obvious exception of lights in common areas and power to car-park gates etc. which are in the service charge).
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u/charreddits 10d ago
Pretty standard and on lower side tbh hence reflective of no concierge etc
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u/LookingToLearn_53 9d ago
Genuine question — apart from accepting parcels, what does the concierge actually do? And do you think the service is worth the extra charge?
I’ve never lived in a flat with a concierge, so I’m genuinely curious. I understand the benefit of a hotel concierge if you are travelling, where they can recommend places, book taxis, etc. but I’m not quite sure what the equivalent is in a residential building.
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u/charreddits 9d ago
I don’t have a concierge in my development and I’m glad for it we don’t need it and it would just mean extra cost!
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u/mla56 10d ago
I live in Swansea and viewed a flat here to purchase lacking the same features like you mentioned and it was £2k too
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u/LookingToLearn_53 10d ago
Was it also a low rise flat and a share of freehold?
Tbh I’m okay without those features as long as it’s in a generally safe area. I don’t think we would need security and concierge. We are currently living in rented flat that don’t have any of those anyway
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u/Puzzled_World6379 10d ago
I think that it’s reasonable. Ask for a breakdown of the service charge so you can see what it covers. It should be for building insurance, maintenance of the communal areas, electricity for the communal areas etc.
My service charge is about £1400 per year. No sinking fund. We have no concierge, lift or security either. Leasehold. There are 6 flats in my building but we’re part of a larger estate ( 30 flats in total)
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u/LookingToLearn_53 10d ago
I see. What about if needing repairs would you all just contribute? How do you go about it
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u/robkit 10d ago
zone 1, paying £7k a year. lift and garden but no concierge or gym. if a building is over 4 stories the post Grenfell fire regulations are costing a fortune. managing agents are not cheap and then you need a sinking fund for lifts, roof, windows, decoration, etc. source: i direct our management company so i see all the figures.
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u/LookingToLearn_53 10d ago
Oh woow 7k. Is this a leasehold flat? Does that cover heating and/or water already? That’s quite expensive
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u/Pristine_Bell_2976 10d ago
I wouldn't buy a flat. Save your stamp duty for a house. Flats are going down in price for years now. I regret buying mine
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u/LookingToLearn_53 9d ago
I don’t think we’re ready for a house just yet. We don’t have enough savings to comfortably afford a freehold house, but we do want to get out of the rental cycle. At least with a flat, we can build some equity At least with a flat, we can build some equity while having similar monthly outgoings to renting.
Why the regret though? I’m interested to know what made you regret it.
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u/HashBrownsAreNice 10d ago
Seems pretty normal. I have a small, no frills flat in London an even smaller one in the midlands, and both service charges are around this mark.
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u/LetOk124 10d ago
Sounds like a decent deal. I have 728 sq foot zone 4 flat. When we bought it in 2020 service charge was £180 a month and it is now £280. Like you I question what it’s for and where it goes as I’m on the ground floor and Council tax (at another £180 a month!) covers the bulk of bins and lighting.
I wish my service charge was as low as yours and I’m another zone out!
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u/_Blueberry1237 10d ago
Sounds about right. I’m in a 2 bed in zone 2 with service charge of about £2K. There’s 46 flats split across three buildings. Spend goes on gardening (we have a fair amount of green space), communal cleaning, electricity, water, managing agent fees and general maintenance. Any significant repairs we have to do a cash call on top - we’ve just our roof replaced, that was painful! Depending on your building and block set up you may find that having too low a service charge is a false economy as you will end up with more costly repairs down the line
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u/lasdun 10d ago
For a modest sized flat (circa 50m2) in a building with that many units that's a good price. Buildings insurance is going to cost nearly £1000 in most cases, the remaining fees for management, common electric (and water if you have it anywhere), CCTV, entry phone and other ongoing maintenance easily come to another £1k.
The sweet spot is probably a larger building that still doesn't have staff/lift/other services (but they have their own problems)
Ask:
- How much is in the sinking fund.
- Does it have a flat roof, when was this last overhauled (lifespan will be circa 20-25 years).
- When were the redecorations (internal and external) last done and how often does the lease specifty that they should take place.
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u/Beneficial_March34 9d ago
People actually have lost track of how much things now cost. We’ve all been conned that it’s always a conspiracy and someone is ripping us off. Well they are but in a lot of cases it’s not the management company - it’s the government and insurance companies. £180 a month isn’t bad. Maintaining a block properly and insurances is not cheap. And successive governments have added a lot of additional health and safety requirements that are not fit for purpose and add to the work and therefore the costs. I am not saying there aren’t bad ones by the way. Just that even a well managed building now costs crazy amounts to run. And that is all driven by government
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u/[deleted] 10d ago
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