Our experienced Leasehold Conveyancers at iconvey have noticed that it is becoming increasingly common for the Service Charges on ex-council Leasehold flats to exceed £5000.00 per annum and in some cases exceed £10,000.00.

The Decent Homes Standard for Social Housing

The increase in Service Charges on ex-council Leasehold Flats is largely due to government legislation set down in 2000 when the then Labour government pledged to "ensure that all social housing meets set standards of decency by 2010, by reducing the number of households living in social housing that does not meet these standards by a third between 2001 and 2004, with most of the improvement taking place in the most deprived local authority areas." And "ensure that all social housing meets set standards of decency by 2010” .

The Decent Homes regulations have meant that Local Authorities throughout the UK have had to embark on a massive programme of improvements to upgrade their social housing stock to provide Decent Homes.

Those that have bought Leasehold flats in Council Blocks (most commonly under the ‘Right to Buy’) are required under the provisions of their leases to pay contributions not only to the costs of day-to-day maintenance and repair of the block (‘Service charges’) but also to the costs of major works and renewals of the structure of the building, including the services and windows. This could also incorporate costs in improving the building.

Such is the condition of the Council Blocks (due to years of neglect) that the works required to bring them up to the Decent Homes Standard are often extensive. The cost of such works will be charged to flat-owners – for example, if major works to a building containing 50 flats cost £1 million, then each flat-owner would be have to pay £20,000. Only those that own their have to actually pay, as the Council will pay the share of the costs attributable to flats which are let to council / social housing tenants

How Does this Effect Potential Buyers?

Often the Seller will have received notice of the works proposed on the ex-council leasehold flats and the cost of such works up to twelve months in advance. This may well be the reason they are selling. Not all the works are done at once and there is often a ‘programme’ of such works planned over a number of years, with an additional £2000-£3000 being added to the annual Service Charges each year.

Those who cannot pay the Service Charge all at once are given loans by the Local Council which they pay back on a monthly basis over several years.  Our experienced leasehold Conveyancers at iconvey advise that it is often the case that when they act for Buyers on the purchase of ex-council leasehold flats they find that there are considerable Service Charge Arrears as well as notices of significant amounts of Service planned for future years. 

It is essential that when purchasing an ex-Council Leasehold Flat that you use a Conveyancer that is experienced in the sale and purchase of ex-Council Leasehold Flats such as our Conveyancers at iconvey. A Conveyancer experienced in the purchase of ex-Council Leaehold Flats will ensure that all service charge invoices received from the Council are paid off on or before Completion or that a significant sum of money is retained after Completion to pay for any invoices that are outstanding or for works that are planned and have not yet been completed.

One difficulty that our Conveyancers encounter is that Councils are often unwilling to give information about future plans and there are often works that have not been planned but that need to be carried out at short notice. Conveyancers that are experienced in the sale and purchase of ex-Council flats, such as our experienced Conveyancers at iconvey, will insist on seeing the Service Charge accounts for the last three years together with any notices received regarding planned works. From these our experienced Conveyancers can look for ‘trends’ and may be able to work out what further service charges there are likely to be in the next two years or so, and arrange for sufficient funds to be retained. However, there are no guarantees that there will not be significant increases in Service Charges on ex-Council Leasehold Flats; your Conveyancers can only work with the information that they are provided with by the Seller and the Local Council.

At iconvey, we are specialists in conveyancing and Property Law with many years of experience.  Our professional and knowledgeable conveyancers  are always at hand keeping  you informed every step of the way.  We ensure that you are always aware of the costs at the outset with a transparent fee structure and no hidden fees.

You can obtain an instant quote for your conveyancing from this website, (just click here). Our quotes are guaranteed, fully transparent and include no hidden extras for a normal conveyancing transaction. Alternatively, simply call us on 0844 225 2061 for more information or to discuss your particular needs.