Residents at one of Birmingham’s most exclusive addresses are facing financial ruin after seeing a huge increase in service charges.
People living in the Mailbox complex in the city centre claim service fees have more than tripled in the past six years and now cost an average of £8,000 a year.
One estate agent said the charges are much higher than other similar city apartments and that the cost had affected potential sales, claiming that despite the current difficult market, the well located apartments could have sold three times over, if the service charge was cheaper.
The agent, who does not wish to be named, said: “In the past I have had sales fall through simply because of the level of service charges and I can say with some confidence that, even in a difficult market, we would have sold the duplexes two or three times over were it not for the service charges. It is as if buyers run into a brick wall.”
Residents claim the fees, which are usually calculated per square foot, are leading to repossessions in the former Royal Mail sorting office - once a sought after location for young professionals in the city and a symbol of Birmingham’s growing stature as a retial and business destination.
On resident said she was paying £653.27 a quarter in 2002 and January 2003 but by October 2003 the bill went up to £1,015.48. By October 2008 it had gone up to £2,038.40.
Residents are believed to be paying an average of up to £4,000 per year in estate costs to Mailbox Management in addition to service charges for the upkeep of apartment communal areas including cleaning and refuse collection and the concierge.
The service charge budget for the year to March 31 shows Mailbox Management costs of £545,500.
Other costs for utilities, cleaning, security, building maintenance and insurance are £269,808.
One resident, who does not want to be named, fears her property may be repossessed.
She said: “The charges have gone from around £650 a quarter to over £2,000 each quarter and on top of that extra charges are being put onto the bill. I just can’t afford the increase.”
Another resident said the service charge was now more than his mortgage on the property.
He said: “I bought a duplex for £280,000 and the service charge was about £500 a quarter which was well within my budget, then it crept up suddenly and now I’m paying about £12,000 per year. It is absolutely ridiculous.”
Another resident who is trying to sell his apartment, said: “The residents management association set the charge on proportion of a total for services such as concierge, heat, lighting. They are also responsible for negotiations with the owners of the Mailbox who allocate a charge to the residents and the charges are distributed to residents based on a square footage. I pay just over £2,000 a quarter which is beyond belief. This is depressing the value of people’s properties.”
Mainstay Residential Limited, which collects the service charge, declined to comment because it acts on behalf of the residents’ management company - Royal Arch Management Ltd - an organisation made up of residents who try and negotiate service charge levels. Mailbox Management, which runs the non-residential part of the complex and is part of the Birmingham Development Company, said it was not responsible for setting or collecting service charges but admitted it collected a fee from Royal Arch via agents Mainstay. The apartments were previously managed by Crosby Homes which handed over control last February. Crosby declined to comment.
Alan Chatham, director of BDC, said: “RAM is responsible for setting service charge level and collecting it.”
As residents complain of crippling service charges at one of Birmingham’s most prestigious apartment developments, Christina Savvas looks at the story behind the Mailbox.
The opening of one of Birmingham’s flagship developments marked a high point in the city centre’s renaissance.
Bought by entrepreneurs Alan Chatham and Mark Billingham in 1998 for £4 million – or, at £5 a square yard, the cost of a good carpet – the former Royal Mail sorting office was transformed into a cutting-edge collection of designer shops, restaurants, bars and luxury apartments.
Within days of signing the deal with Royal Mail, Chatham and Billingham sold air rights for 144 luxury apartments to Crosby Homes for £4 million and followed up by taking £7 million off Malmaison for hotel building rights. Building costs started at an estimated £35 million.
The landmark building was put on the market for £300 million in 2007, triggering the city’s biggest ever commercial property deal but later taken off when property prices began to fall.
Since its launch, the mixed-use scheme has attracted some of the greatest names in fashion to Birmingham, including Harvey Nichols, Gieves & Hawkes, Thomas Pink, Christian Lacroix, Hugo Boss and Emporio Armani.
Unapologetically exclusive, The Mailbox attracts shoppers from as far afield as Cheshire and Oxford who often spend thousands of pounds per visit and, so successful has the retail side of the business been, that Harvey Nichols recently expanded its store by a third, while the Armani store is believed to be one of its best performing in the UK.
Having secured the BBC as well as blue-chip occupiers such as Railtrack, the commercial offering at the development appears to continue to go from strength to strength.
