A great one bedroom flat in the posh Summertown, in north Oxford, is up for sale at £15,000. But this flat has been up on the market for more than a year with nobody buying it. It is bewildering to think that no one would be interested in getting such a bargain. But here is the catch- the flat is in a development restricted to the over-60s and has an absurd service charge of £775 a month, or £9,300 a year.
Real estate agents Breckon and Breckon say that this is the only reason that has been putting off potential buyers from this flat in Charles Ponsonby House, run by the Wyndham Housing Association. Most of the 105,000 plus retirement homes in the UK come with a host of complex and unwanted management charges. The most hated is the exit fees of about 1-5 percent, which has to be paid to the developer upon the resale of flat.
Most homes come on the market when the original owner dies. But even then the service charges keep accumulating, making them a burden for the new owners. The developers will soon have to think of something, otherwise they will keep losing their potential clients.