The majority of these rises have been introduced in newer builds. Currently, the average annual maintenance charge stands at £2,777 for these buildings and comes on top of mortgage, council tax and insurance. Whilst London property owners might be used to paying handsomely for these facilities, the hike is only set to increase in the coming years, which could force many to reconsider their position.
For those who pay an annual service charge, it is often unclear exactly where their money is being used. Management companies tend to stockpile all their leaseholders’ cash, until repairs are necessary in communal areas or to building facilities. In commercial buildings such as tower blocks, maintenance can be as simple as testing fire alarms or even cutting the grass outside. Whilst these tasks might not seem like pricey endeavours, the costs can soon add up, especially when reactive repairs are needed.
However, the inflated costs of annual service charges no longer seem to be in keeping with the needs of commercial buildings. In some areas, residents are being charged as much £7 per square foot for these services and seeing very little return for their investment. Whilst management companies insist the money is being injected into facilities such as gyms and saunas, this still doesn’t account for the massive rise in price.
Unfortunately, as a leaseholder, it is very tricky to battle against these ever increasing prices. This is mainly down to the fact that the manager of your property is also the owner and therefore has complete control over how the money is invested. For many leaseholders this is the main point of contention, as they simply aren’t seeing that money put to good use.
However, it is possible to elect a new manager through a scheme known as Right To Manage. If you’re able to prove that you’re being exploited by the current management team, then the government has the power to source a replacement. Alternatively, you can also take over the running of the building yourself. In either scenario, the scheme gives leaseholders the ability to contest their building maintenance charges and take evasive action against them. They then have a choice between choosing a new manager or appointing themselves in lieu of the old one. As a result, leaseholders will have a fair say on the price of annual service charges and how they are used.
If you do decide to become the manager of your owner leasehold, then you need to think about how you will undertake all building maintenance activities. Usually, this will mean forming a committee to discuss and prioritise tasks. Once you have a clearer idea of what needs to be done, your next decision should be how much each task will cost. Contacting building service teams is a good place to start, as it will provide you with a better sense of how much you can expect to pay for building maintenance.
In the short term, you might want to look at rectifying major issues such as rising damp or leaking HVAC systems. With reactive repairs seen to, you can reassess your list of priorities and begin to think about the future of your building. Most building services will also provide preventative maintenance plans. These can be particularly useful in London buildings designed to cater for a large number of occupants. Preventative maintenance also works out as much cheaper option in the long run, as you will only fork out for repairs half as often. In fact, over time you can cut your building maintenance costs to well below the London average and focus instead on making genuine improvements to the property.
Taking over the management of a leasehold property is never a decision that should be taken lightly. However, should you choose to dictate your own annual service charges, then Blake’s Building Services would be delighted to help out with any reactive or preventative maintenance. Our experienced building maintenance team has worked in the London and Kent area for over a decade, assisting thousands of commercial properties in this time. For more information on any of our services give us a call on 01634 86 29 29 or get in touch through our contact page.