Thisismoney.co.uk - Service charge tipping point for flat buyers as soaring costs lead lenders to refuse them a mortgage

Flat owners are facing a service charge tipping point that could render their homes unsellable and unmortgageable.

In recent years, service charges have risen sharply while the price of flats has fallen. 

Now, mortgage brokers say they are seeing increasing numbers of people having their mortgage applications rejected due to this disconnect. 

Mortgage broker Aaron Strutt of Trinity Financial says: 'If we have not already hit the tipping point then we are pretty close. 

'People are worried about buying flats at the moment because of the fees and ongoing unknown costs.'

Steph Lyke, a partner in the residential property team at law firm SAS Daniels, says: 'The breakdown of the service charges will need to be investigated, it could well be that the costs relate to a one off major works project, which generally the valuer would accept this as it is an indication of good property management. 

'If the costs are unproportionate and due to poor management, or includes high management fees, then the lender will likely decline.'

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