Western Mail Property Doctor Column #2
By admin
Issued on behalf of Emyr Pierce Solicitors
I am looking to buy a flat in Cardiff Bay, but I am worried about the additional fees I might incur on such a property.
Cardiff Bay is typical of many redeveloped areas across Wales.
The likes of Cardiff Bay, Newport and Swansea are witnessing an increasing number of high-rise flats.
This is mainly due to the high cost of the land, as it is cheaper to go upwards rather than outwards.
Many of these properties are invariably managed by large, national management companies, and buyers need to be aware of some potential pitfalls, and some high charging fees.
For example, when buying a flat, obtaining notices of transfer of ownership and notice of mortgage can together cost in the region of £235, while a deed of covenant will set you back almost £200.
These flats are also subject to annual service charges, and a fee of £1,200 per year is not untypical.
But many of these buildings are still new, and this fee is probably paying for little more than the cutting of the grass at present.
In time, these buildings will need maintenance and repair, and these service charges will increase and you will be asked to contribute more.
Finally, make sure that your lease has the necessary enforcement covenant whereby you can request that the landlord enforces the terms of the lease against adjoining occupiers.
You may need to rely on it if you have issues with a neighbour who regularly indulges in tap-dancing to Black Sabbath in the middle of the night!
Flats are very different from stand alone properties where you can pretty well ignore your neighbours if you don’t like them!
So, you need to make sure you have the necessary legal protection in place, if the person living above you, below you and next to you starts to make your life uncomfortable.
Sir John Gieve, the deputy governor of the Bank of England, has this week warned that interest rates are too low. What impact would higher rates have on the housing market.
Sir John’s comments come as forecasters predict a further increase to 5.75 per cent next week, and that the level could reach 6 per cent by the end of the year.
There are many factors which affect the health of the housing market, and the impact of these rises over the short-term will be unclear for a while.
But it will mean that more and more people may turn to fixed rate mortgages, and while new products will move with the new rates it will mean that people will still have the confidence to get into the housing market.
Buyers will be helped by the lenders as well – who know that they have to remain incredibly competitive to ensure that they maintain their position in the marketplace.
However, such rate rises will also mean that we will see more and more of the “birth-to-death” mortgages which make it far more affordable for people who would otherwise struggle to buy a property under the traditional 25-45 year mortgage period.
