What does 'Sink Fund' mean when buying a property?

Find out what Sink Fund means when you are buying a property. 'What does Sink Fund mean?' plus over 150 other property related terms and jargon in plain English

Sink Fund

Most leasehold and share of freehold properties have a sink fund. This is an amount, kept in a bank account, to pay for major expenses such as a new roof or new windows.

It is not meant to be used for day to day purchases and maintenance. Note that just because there is a sink fund, this does not mean it contains adequate funds and it may have to be topped up by the leaseholders should urgent and major repairs need to be carried out on the building.

Checking if there is a sink fund and, if there is, how much cash is in there is a standard part of the buying process alongside carrying out managing agent enquiries to see what works have recently been carried out and what works are planned.

This all gives you advanced warning of what expenses may be coming up should you buy the property and how expensive these may be to you.

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Chapter 14: Viewing Properties and Making Offers

"... methods for financing a Share of Freehold property are: Pay a specific amount every year for day to day maintenance and bills. Any payments purposefully over this are called the sink fund and are savings for the unexpected. Pay for things as they come along. Hire a managing agent to do..."

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What's in the 2022 edition .....

Why buying property is right for some and wrong for others;
The state of the market today;
What Brexit and Covid 19 means to the future of UK property;
How the media have become unreliable indicators of the market;
Who makes good quality predictions for the property market (and who doesn't);
How the market works over the short term and the long term;
The difference between property bubbles and property booms;
Why it can be a good idea to buy when prices are falling;
The principles of buying a property to let and what the text books don't tell you;
Ways to get on the property ladder when it looks impossible;
How professional buyers and investors work with estate agents to get better deals;
Why you should see as many Financial Advisors as possible;
What to do before you start viewing so you don't lose your dream home;
Who the surveyor, solicitor and estate agent are really working for;
How to make an offer to get things your way;
Who to trust and who, with the best intentions, may be misleading you;
Why you should work to minimise the time between offer agreed and exchange;
Making sense of a property survey including:
- What type of survey to get and why structural surveys can be money wasted;
- Why surveyors should never estimate the cost of works;
- When rising damp, penetrating damp, subsidence, cracking, sagging roofs, bulging walls and all the other frightening things in a surveyor's report might be serious, and when they are not;
- Why asking the vendor to carry out work is not always a good idea.
Step by step guides explaining what should be happening, what can happen, and how to solve mole hills before they become mountains;
Over 140 terms in an easy to use glossary so the jargon of the property industry can be understood;
20 true stories of successes, and disasters, that real people experienced when buying a property.

.... and what's not in the book ...

Continuous commentary banging on about how great property is and that it is the only place to put your money!
Recommending businesses that I get kickbacks from.
Rewording and republishing what is available freely from most websites anyway.
Endless tales of how easy it is to buy property and profit.
Attempts to sell you some course or other product.
Blank pages and spaced out text to make the book seem bigger.