One of the features of City life is the excitement & launch of new apartment blocks. Often located on once derelict or semi derelict land & invariably replacing an eyesore with something modern good looking bringing life back to the area. The advertising sizzles & encourages interest but all the nearby local residents are invariably looking out for the headline prices. New stock invariably carries a premium but is it worth it?
I ask this question as several Birmingham blocks have just passed their ten year birthday or are fast approaching their ten year NHBC guarantee end dates. After this point it is the block not the developers insurers responsible for all the maintenance above fair wear and tear. This means the management fees can rise in the years following unless suitable provision has been made over the preceding time to build a ‘sinking fund’ which will mean future capital expenditure can be made without drawing more from the residents. Modern blocks have flat roofs, lifts & other features which need replacing or serious repair within a medium term. Latent defects are hopefully flagged before & dealt with before the warranties end.
One of the attractions of leasehold apartments is that the managing & the maintenance of the exterior plus common parts happens through block managing agents and they are often supported by a hands on or indeed hands off residents board . This is somewhat removed when compared to the freehold house owner who regularly has to watch out for blocked gutters, windows leaking and organising the regular repainting of the exterior. Whilst the service charges sometimes seem excessive they at the same time bring an easy peace of mind.
For investors looking for regular returns there has to be a serious attraction towards the newer blocks because these running costs are invariably known for the first ten years.
We have just launched the Metalworks in the Jewellery Quarter, comprising 105 units in the first phase fronting Warstone Lane & another sixty to follow on Carver Street. This new scheme of predominantly two bedroom flats is being well finished and benefits from being close to all the improving amenities of the JQ. Certainly one to be recommended.