Property management companies raise costs

April 9, 2016 by Brendan O'Neill

Renting

According to recent research, around one third of property management firms have increased their annual fees over the last two years.

The owners of flats have seen typical property management fees increase to an average of just below £2,800. This fee is the amount charged for new build flats, while older flats are likely to attract an annual charge of £1,863. The study was conducted by Direct Line for Business, and discovered that 33% of management companies have raised their fees in the last couple of years.

Property management charges are paid to cover the cost repairs to communal areas, to build a fund to cover any major repairs to the property, or to cover the costs of luxury amenities. Experts advise buyers to check the costs before buying a flat, which will include ground rent and an annual service charge. The charges may vary between developments, as some will calculate the cost by the number of bedrooms, while others will charge a flat rate or even base the charge on the square footage of space in the flat.

According to barrister John de Waal QC, it is possible to have some recourse if a person isn’t happy with the service provided by the management company. He added that there are procedures which may help a leaseholder to have their service charged reduced or even receive a rebate.

Mortgage advisers who are CeMAP trained will be able to advise buyers of flats about the potential costs involved when buying a new or older property.