Category: Uncategorized

What is service charge?

Service charge is the contribution you pay towards the management, repair, and general upkeep of the building you live in. If you own your home on a leasehold basis, the services included and what you’ll need to pay for should be clearly set out in your lease.

In practice, this often covers things like cleaning, gardening, utilities for communal areas, repairs, and maintenance of any shared heating, lifts, and security systems.

Thanks to the Building Safety Act, service charges are now also likely to include costs linked to fire safety checks, compliance, and ongoing maintenance required under the new legislation.

If you’re buying a flat, service charge typically covers buildings insurance too. A portion of it may also go into a reserve fund (also called a sinking fund), which is there to help cover the cost of future or unexpected works to the building. It’s essentially a rainy-day pot for your building.

Service charge is usually paid to a managing agent, appointed by the building’s landlord or the Residents Management Company (RMC). They handle the running of the communal areas. Depending on your lease, it might be payable annually, twice-yearly, quarterly, or monthly.

How are increases calculated?

Service charge is typically reviewed once a year, with the next year’s forecast based on costs from the year before.

At Pocket, service charges are always calculated this way. This means they can go up, but they can also go down. If the building spends less than expected, the following year’s charge could be lower. That said, in reality, you can usually expect a slight increase each year, roughly in line with inflation.

Over the past few years, service charges have seen steeper rises due to inflation, increased energy and insurance costs, and extra requirements brought in by the Building Safety Act.

Homeowners have the right to request a breakdown of how the service charge is calculated and where the money is going.

Do all homes pay service charge?

If your home shares any part of the building with others, there’ll likely be a service charge involved – someone has to cover the cost of maintaining those shared areas.

This applies whether your flat is leasehold, commonhold, or share of freehold (want to know the difference? Check out our blog on leasehold and commonhold). There will always be some shared responsibilities that homeowners need to chip in for.

Usually, the amount you pay is based on the size of your home, so larger flats contribute more than smaller ones.

Do I get a say in how much my service charge will be?

That depends on how your building is managed – usually laid out in your lease if you’re a leaseholder.

At Pocket, every building is managed by a Residents Management Company (RMC). Every homeowner automatically becomes a member. Some go one step further and become Directors, helping to make decisions on behalf of the wider development.

While some costs (like insurance and safety compliance) can’t really be avoided, residents do have a say in other areas. This includes things like whether to bring in a new gardener, reduce lighting costs, or spruce up the lobby. These decisions can directly impact the overall service charge.

The RMC usually appoints a managing agent to take care of the nitty-gritty, day-to-day running of the building.

How do I know how much the service charge will be for the home I’m buying?

If you’re buying a new build, you should be given an estimated service charge early on. Once you’re further along in the buying process, your solicitor will receive a full breakdown of the expected costs for your specific building.

If you’re buying a resale home, the seller or their agent should tell you the current service charge payable.

The UK government’s new Commonhold White Paper could mark a major shift in homeownership, aiming to replace the current leasehold system with the commonhold model. But what does this actually mean for flat owners and buyers? In this guide, we break down the key differences between leasehold and commonhold, what the proposed changes involve, and how they could impact future homeowners – including those buying Pocket homes.

What is a leasehold?

A leasehold is a common form of home ownership in the UK, where you buy the right to occupy a property for a set period of time. It’s typically used for flats or homes in shared buildings, where the land itself is owned by a freeholder (more on them in a bit).

Lease lengths vary, and properties with fewer than 80 years left on the lease are unlikely to qualify for a mortgage. To sell or remortgage, the lease would likely need to be extended. Thanks to the Leasehold and Freehold Reform Act 2024, new lease extensions now typically last 990 years.

Leasehold properties can be bought and sold on the open market, just like freehold homes. However, with all leasehold properties, there is an underlying freehold, owned by the freeholder – the person or company that owns the land the building sits on.

For older leasehold properties, leaseholders often pay ground rent to the freeholder – a fee that usually increases every 5-10 years. However, since the Leasehold Reform (Ground Rent) Act 2022, new leasehold homes now come with a peppercorn ground rent – a nominal fee, often just £1.

Leaseholders also pay a service charge towards the upkeep and maintenance of the building and communal areas. This covers things like:

• Buildings insurance
• Cleaning of shared spaces
• Communal electricity and heating
• Lift and security systems
• General maintenance of communal areas

Part of the service charge often goes into a reserve fund to cover future major works on the building.

(Just to clarify: this refers to long leasehold properties, which is different from a short-term tenancy agreement that most renters sign.)

What is a commonhold?

With commonhold, owners own the freehold of their individual unit.

As a commonhold owner, you would jointly own and be responsible for the communal areas, along with the other unit owners, through a commonhold association. This means contributing to the maintenance and upkeep costs, similar to how leaseholders pay a service charge. The commonhold association determines how much these costs will be, in line with legal requirements for residential buildings.

Some commonhold associations may choose to hire an external building manager, with the costs shared by the unit owners.

One key difference? No ground rent – commonhold owners own the freehold of their unit, so there’s no need to pay it. This is also true for newer leasehold homes, thanks to the 2022 ground rent reforms.

What happens now?

As it’s still early days, the government hasn’t yet outlined the full requirements that developers and landlords will need to follow once the legislation comes into force. So, we don’t know exactly how this will affect new-build homes going forward.

Once the law is in place, developers will need to comply with the new rules. However, given the scale of these changes, it’s likely to take several years before they are fully implemented.

Are Pocket homes leasehold?

Yes – all Pocket homes for sale are currently leasehold properties. Lease lengths vary across our developments, ranging from 125 years to 999 years.

Each Pocket development has a Residents Management Company (RMC), made up of all the owners. Once all residents have moved in, the RMC takes over responsibility for managing the communal areas – similar to how a commonhold association would operate.

The RMC also has a say in what is included in the service charge and works with external building managers to oversee the running of the common areas.

There are also some benefits to the leasehold system. For example, managing agents can enforce regulations that benefit all residents – such as preventing noise disturbances, which helps keep the peace for everyone.

The starting point of time – and now, the starting point of homeownership.

Our new Charlton development, The Heights SE7, is ideally located in the heart of the Royal Borough of Greenwich, making it the perfect base to explore the area’s diverse surroundings. 45 one-bedrooms and 3 two-bedrooms homes are now available to first time buyers across all London boroughs. To celebrate this milestone, we’ll highlight the top attractions in the local area.

Greenwich town centre

Where to start? Well, it is the start of time, so a stop at the Royal Observatory is a no-brainer. From there, you can wander to the National Maritime Museum, the Queen’s House, and the vast greenery of Greenwich Park. Don’t forget Greenwich Market, where the world comes to you! Think Thai food, Nepali cashmere, and South American coffee. If tea’s more your vibe, the Cutty Sark (a famous tea clipper) is just a two-minute stroll away. It’s free to admire from the outside, though you’ll need to pay for a tour inside.

Getting there: A 20-minute cycle or 177 bus from The Heights SE7 development.

Charlton House and Park

Charlton’s architecture is a mix of styles that all bring something unique to the table. Take Charlton House, an impressive Jacobethan manor house that hosts changing exhibitions, inspiring interiors, and events throughout the year. On the ground floor, you’ll find Frilly’s Tea Room, plus the Old Cottage Shop Café tucked away in Charlton Park.

Getting there: Just a 10-minute walk from The Heights SE7 development.

The 02 and Greenwich Peninsula

It’s been a quarter of a century since the Millennium Dome (as it was called back then) made its mark on the London skyline. Today, the site is home to the iconic O2 Arena, the more intimate Indigo at the O2, a designer outlet mall, a cinema, and plenty of restaurants and bars. North Greenwich Station, right next door, connects you to the Jubilee line, whisking you to London Bridge in just 7 minutes.

If you’d rather stay above ground, you can climb to the top of the O2 for a thrill or take a cable car across the Thames, both offering stunning views of Canary Wharf and beyond.

Getting there:  A 15-minute cycle or a 422/486 bus from The Heights SE7 development.

Charlton retail parks

Stretching about a mile along Bugsby’s Way, the retail parks here offer a wide range of shopping and leisure options, just a 10-minute walk from The Heights SE7.

While it’s not as independent as nearby Charlton Village or Greenwich town, you’ll find all the essentials for setting up home. Need furniture? Ikea, Next, and Home Sense have you covered. For food shopping, you’ve got M&S, Sainsbury’s, Aldi, and Lidl. Feeling adventurous with DIY? B&Q’s the place to go.

And if you’re after a bite to eat or a movie, you’ll find plenty of restaurants and an Odeon cinema nearby.

Getting there: Just a 10-minute walk from The Heights SE7 development.

Charlton Village

Much of Charlton falls within the ‘Charlton Village Conservation Area,’ with its commercial heart stretching east from Charlton House along the aptly named street, ‘The Village.’ Here, you’ll find The Village Greengrocers, offering a great selection of health foods and organic produce, while ‘The Bugle Horn’ is a popular pub set in a Grade II listed building. For pampered pets, head to ‘Top Paws Grooming Salon.’ Other handy services along the parade include a pharmacy, hair and beauty shops, and international food stores.

Getting there: Just a 5-minute walk from The Heights SE7 development.

Charlton Lido

Offering an Olympic-size heated pool, gym, café, and sunbathing space, there’s something for everyone at Charlton Lido and Lifestyle Club. Its enduring appeal has kept it in the area since 1939. It may seem hard to imagine swimming outdoors in winter, but the pool is heated to 25°C, and in warmer months, there are sunbathing areas to soak up the rays.

Getting there: An 18-minute walk from The Heights SE7 development.

Oxleas Woods and Severndroog Castle

Perched on the highest point in South London, Severndroog Castle offers panoramic views of the area. Look north and west, and you’ll see the urban sprawl of Canary Wharf blending with the historic heart of Central London. On clear days, you might even spot the iconic arch of Wembley or planes descending into Heathrow. To the south, the green expanses of Oxleas Woods and Eltham offer a peaceful contrast. The Grade II-listed Gothic castle itself, built in 1784, features turrets and ornate ceilings. Take in the views from the viewing deck, relax in the tearoom, or explore the surrounding Oxleas Woods. On the first Sunday of every month, a popular farmers’ market offers local arts and crafts, baked goods, and delicious food.

Severndroog Castle Viewing Platform and Galleries opening times: Sunday – 10:00am – 4:00pm (last entry 3:45pm)

Getting there: A 10-minute cycle or 486 bus from The Heights SE7 development.

Woolwich

Just a short journey east from Charlton, Woolwich boasts fascinating naval and military history and some impressive architecture. From the new Elizabeth line station (only 14 minutes to London Liverpool Street), head towards the river and explore the pedestrianized Royal Arsenal area, home to an array of eateries and a farmers’ market on the second and last Saturday of each month. ‘Woolwich Works’ is an important cultural hub where you can join dance classes, watch comedy, play chess, or relax with a hot drink at the on-site café. At ‘Punchdrunk,’ enjoy a unique theatre experience where you’re free to roam the performance spaces – you’ll likely see something new each time you visit.

Getting there: A 15-minute cycle, multiple buses, or an overground train from The Heights SE7 development.

Plumstead Common

Around 20% of the Greenwich borough is made up of green space, and Plumstead Common offers a peaceful retreat in the heart of the bustling Plumstead community. The common features a nature reserve, gentle slopes, lakes at ‘The Slades,’ and outdoor gym equipment. Just off the common, ‘The Slade Café’ offers a quirky spot for brunch – set in a converted 1930s public toilet. ‘The Plumstead Pantry’ is another beloved local fixture.

Getting there: A 15-minute cycle from The Heights SE7 development or the 53 bus.

Looking to call Charlton home?

It’s an exciting time for the borough. The Elizabeth line has recently joined the Jubilee line, DLR, overground, boat, and London’s only cable car. The opening of the Silvertown Tunnel in April 2025 will also provide free bus journeys across the Thames for those who’ve lived in the Greenwich borough for at least 12 months and offer a free shuttle bus for cyclists through the tunnel.

The Heights SE7 consists of 45 one-bedroom Pocket flats (two of which are wheelchair adaptable) and 3 two-bedroom Pocket flats. Just a 5-minute walk from Charlton Station, it’s perfectly placed for transport links – making it easy to explore Greenwich or head to the city.

Pocket offers discounted homes exclusively for locals, giving them the chance to own a piece of the city they love. Our homes are unique, we sell them at a 20% discount compared to other one-bedroom flats in the area. Pocket is an alternative to shared ownership—no rent, and you own 100% of your home from day one.

Tom, a marketing analyst, and his partner Diane, who works in finance, moved into their first home together in April 2022 after viewing a Pocket Living apartment at Addiscombe Grove CR0 in East Croydon, and falling in love with its modern design, great transport links and its affordable starting price.

They were previously living separately in Brighton and Mitcham, respectively, having spent a number of years studying at university and working to save up ahead of their move to London for work. “We had both secured jobs in the capital and wanted to live together and so decided the next logistical step for us was to purchase our own home together somewhere fairly central”, explains Tom.

The couple discovered Pocket Living through a family recommendation. “My partner’s brother lives in a Pocket development in Kingston and he had really positive things to say about his experience so we decided to take a look around its Addiscombe Grove development in East Croydon. It wasn’t the only home we looked at in the area but we really liked the idea of buying a new build and the appeal of no one having lived there before, as well as Pocket’s reputation as a good developer. The discount applied for first time buyers, which was also very appealing so we decided to buy a one-bedroom apartment there”, says Tom.

Pocket Living is an innovative housing developer, which delivers one-bedroom apartments exclusively to first time buyers living or working in London. All of the homes are available at a 20% discount to the local market value and owners own 100% of their home.

Seamless buying process at Addiscombe Grove

As it was Tom and Diane’s first home, they were both reassured by the ease of the buying process. “Pocket Living provided us with really helpful guidance on the steps involved in buying our apartment, and even connected us with recommended mortgage advisors and solicitors. It made the whole process a lot smoother, which was exactly what we needed having not done it before”, they explained.

Location, location, location

The location of Addiscombe Grove, which is a four-minute walk from East Croydon station, was another major draw for the pair as the line offers excellent transport links via Thameslink, Southern railway and the Gatwick Express. Both London Bridge and Victoria stations are less than 20 minutes away, while residents can get to Gatwick Airport in as little at 14 minutes.

“We wanted to live in East Croydon for its commuting convenience. I work in Battersea, and my partner works in Canary Wharf, so having East Croydon station nearby has been fantastic”, said Tom who noted that he can leave his home at Addiscombe Grove and be on the train platform within a matter of minutes. The great connections to Brighton, which takes just 50 minutes door to door, also means he can easily visit his grandad who lives there.  

Beyond the commute, the couple enjoy spending time in the local area, exploring the variety of shops, restaurants, and entertainment options on their doorstep. “We will often take our friends to BOXPARK Croydon when they come to visit. It has lots of food options so it great if we want to grab a bite to eat, although Oodles, a Chinese restaurant on George Street, is a particular favourite of ours”, said Tom,

A home that meets their needs at Addiscombe Grove

Moving into a new home, complete with modern fixtures and fittings, meant that the couple could put their own personal touch on the property. “We were specifically looking for a new build as we didn’t want to do much work to it but we were very excited to decorate it, painting the walls, installing floor to ceiling TV cabinets and giving it a really cosy and comfortable feel – this was made much easier by the fact that IKEA is just a 12-minute drive away”, they noted.

Top tips for aspiring first-time buyers

For those dreaming of owning their first home, the couple has shared some advice:

1. Explore the area: “Make it an adventure! Spend time in the neighbourhood you’re considering. Walk around, visit the local cafes, and get a feel for the community vibe. It’s exciting to imagine yourself living there, and it helps you make a confident decision.”

2. Save early and consistently: “No matter how small the amount, every little adds up. Consider using a simple budgeting rule like the 50/30/20 method: allocate 50% of your income to needs, 30% to wants, and 20% to savings. Watching your deposit grow is incredibly rewarding and brings you one step closer to buying your first home.”

3. Take advantage of living at home: “If you have the opportunity, living with family for a bit longer can supercharge your savings. It’s a great short-term strategy that can help you achieve your long-term goal of homeownership faster. It’s a small sacrifice for a big reward!”

4. Stay positive: “Buying your first home can feel daunting at times, but it’s an incredible feeling when you finally get the keys and step into a place you can truly call your own. It’s all worth it when you see your hard work pay off.”

Ah, the start of a new year – the perfect excuse for a fresh start, a new diary, and a long list of overly ambitious new year’s resolutions. But if 2024 is the year you’ve decided to trade in your rented digs for a place to call your own, we’ve got some realistic, first time buyer specific new year’s resolutions to help you get there. And don’t worry, these won’t involve kale smoothies or 5 a.m. wake up calls – just a bit of planning, saving, and savvy decision making.

1. Save a specific amount each month

Unfortunately, a home deposit doesn’t just appear magically. Work out how much you’ll need to save by your target move in date, and divide it by the number of months you’ve got until then. Then set up an automatic transfer to a savings account, preferably one with good interest. You could also consider a LISA to boost your savings. Tip: treat this as a non-negotiable bill, not something you’ll ‘get around to later.’

2. Know your credit score (and show it some love)

Your credit score is like your financial CV – make sure it’s on top form. Use a free credit report tool to check your score and look out for any errors. If it’s not quite where you’d like it to be, don’t panic. There are often small changes you can make which could make a big difference when it’s time to apply for a mortgage. Tip: We often work with Censeo Financial, an Independent Mortgage Advisor, and they recommend CheckMyFile to get a comprehensive view of your credit report.

3. Complete your Pocket Living affordability assessment

If you’re serious about buying a home (and let’s face it, you wouldn’t be reading this otherwise), your next step is to see what’s realistically within your reach. Complete an affordability assessment for the Pocket scheme you like the look of to find out what kind of mortgage you could qualify for. 

4. Define your non-negotiables

Not every property will tick all the boxes. Start by identifying your top five must-haves (e.g., a location close to work or wfh space) and your deal-breakers (e.g., no outside space or too far from public transport). This will keep you focused during viewings and help you make confident decisions when the right property pops up.

5. Build your emergency fund

Even if you’re moving into a brand-new Pocket home, life’s little surprises don’t stop once you get the keys. Whether it’s unexpected repair costs or just making sure you’re not eating beans on toast every night after moving in, having a rainy-day fund will give you peace of mind. Aim for three to six months of essential expenses tucked away in an easy-access account.

6. Book a viewing and take the leap

Once you’ve got your finances and priorities in order, it’s time to take the next step: booking a viewing. With Pocket Living, you’ll get access to affordable, beautifully designed homes that are built specifically for London’s first time buyers. And who knows? Your perfect home might be waiting for you just around the corner.

Buying your first home doesn’t have to be overwhelming. With the right new year’s resolutions (and a bit of determination), you’ll be well on your way to unlocking the front door to your own place in 2025. So why not start now? Create your My Pocket account, complete your affordability assessment, and make this the year you leave renting behind for good.

Happy new year!