Maintenance costs of Leasehold Properties: Service charges and other costs

Most or all of the external maintenance of leasehold flats will be performed on your behalf by a property management company and you will be charged pro-rata for these works – payment is normally made within a quarterly, bi-annual or annual Service Charge. On occasions, a one-off payment may be charged for emergency maintenance work – such as a structural or roofing problem that is not covered by the building insurance. These charges would normally be communicated up front to warn you of the cost – you would have some amount of time to query or challenge the cost before the works would go ahead.

Service charges, which include building insurance for a say 150,000 pound flat in South East England normally range from 500 to 1500 pounds per year. In addition to this, there might be a 5-10% chance of a one-off bill of say 500-2500 pounds for emergency repair work. Service charges do not include the interior maintenance you might have to do, like re-decoration, cleaning or replacing carpets, unblocking pipes, replacing locks, mending showers, replacing boilers. This annual amount is likely to be about the same as the service charges.

In all, the maintenance and repair bills (including service charges) for a typical 150,000 flat would be in the range of 1000-3000 pounds a year. If the property is freehold, and you do most of the work yourself, you might be able to halve these costs. That said, if a boiler need replacing – something which happens every say 7 years, then the bill for a professional to do this job will be between some 900 and 1600 pounds.

As you can see, if you have a medium sized portfolio of 10 properties (all say 150,000 pound flats), and a bad year, you might be paying some 5-10,000 pounds above your base estimate. Your total base estimate including service charges if you do some work yourself (e.g. decorating) and contract other work to be done (boiler, plumbing) could be about 20,000 pounds, or 2000 pounds a property.

Maintenance costs of Freehold Property

If you have a freehold house, you will be responsible for all the repair and maintenance yourself. If some of this repair work is caused by natural disasters such as flooding or storms, you might be able to claim the cost of repair back from your insurance company through your building insurance. Make sure you take photographs of the works and damage and can count on an objective builder to give an expert view on what the damage was caused by – so help with the insurance claim. Also contact the insurance company as soon as you look as if you need to make the claim, preferably before the work is done.

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