To buy an ex council flat cash?

[gelatodipistacchio]

I've been looking for a home for a long time. I have agreed to buy a place at the top of my budget and I think it will fall through. A council flat which would meet all my needs (though it's slightly smaller than I would like) has come on.

The cons I can think of are:

• won't appreciate at the same rate as other real estate
• not as nice a place to live as a Victorian terrace
• would this be embarrassing for my daughter? I'm not from England and sometimes I don't understand subtle social rules.
• leasehold, which I understand involves risks and restrictions

The pros are:

• financial freedom!
• a feeling of lightness due to not having money stress
• maybe I can save up to buy a holiday home, which will increase my exposure to the market/potential gains on real estate long term

I'd appreciate any thoughts anyone might have!

There is absolutely nothing wrong with an ex-council flat. However, you will quickly regret buying leasehold. It sounds as though you have a decent deposit for the Victorian terrace that you really want so go for that.

I'm assuming this ex council flat is in a nice area where most have been bought rather than in the middle of rough council estate? If its in gentrified London then I can't see there would be any stigma.

Ps no shade on anyone who lives in a council house. I think it's obvious that I don't care that much about snobbery given I'm considering this. But I think it would be disingenuous not to consider this aspect of residing in a council flat

I think the one thing to watch out for where the council is the freeholder is the service/maintenance charge. If it decides to do some major repairs then you have to pay your share. This is true of any leasehold flat but if the council is the majority leaseholder too there may not be much room for any discussion or negotiation.

@HotChocolateLover can you go over some of the worst parts of leasehold properties?

I would like to put a summerhouse in the garden and I'm a bit worried the council wouldn't permit this

If its all you can afford, buy it. Or keep renting. You don't really get much choice when you're poor to be fair. You could try and go for a victorian terraced house, but since it's old it may have issues, are you rich enough to pay to solve said issues? They could be very expensive problems to solve.

Although I'd find out more about the leasehold and what I'd be expected to contribute to etc.

I did. It worked well and tripled in value over ten years (London) and I really enjoyed living there.

It may be more difficult to sell on when you want to, especially if it’s concrete build, deck access or high rise, which few mainstream mortgage lenders will lend on. Avoid those, unless you envision never needing to sell on quickly.

Council estates generally have higher crime rates and incidences of antisocial behaviour than their surrounds. It’s what happens when you bundle lots of chaotic people with social problems together, however much we’re supposed to pretend otherwise. However, estates can also have a great community vibe.

Approximately 80% of all flats in the UK (a number amounting to over 4 million) are leasehold; it’s a perfectly standard and usually unproblematic tenure for a flat and as long as your solicitor explains the terms of the lease and you’re happy with them, there won’t be any nasty surprises.

Be careful. I used to own an ex LA flat and the council had done no maintenance to the estate for decades. All of a sudden, they started major works and the leaseholders had to pay. I had a bill if £12,000 for new doors and windows, nowhere near what they were worth, presumably because I also paid a share of scaffolding and management and various other costs for my ground floor flat.

They had loads of other works planned that could've cost me thousands. I sold it and don't regret it.

I've been living on a council estate, as a leaseholder, for 12 years. It's been amazing. My neighbours are great (no antisocial behaviour) the communal garden is huge and the maintenance charges lower than if I was on a garden square in a Victorian terrace (am in London.) However..... major works are super irritating - so check what is coming up. We've probably spent £20,000 on major works since we've moved in. That said, our council tax is low - we're now moving (and have sold our flat back to the council) - the council tax on the house that we're moving to will equate to major works costs over the same time.
Oh, and my children are not embarrassed about living on an estate, incidentally.

Is it a private garden for that flat? Unusual for a council flat but not impossible! If not, they probably won’t let you erect a permanent structure in communal gardens, no.

I loved my ex council flat that I liv3d in for ten years . Only moved as had another baby . Every year the entire close would have a bbq and drinks outside in the garden and it was a nice way to catch up and get to know the neighbours . I live in a semi in a quite deprived area now . I dont really know anyone . Go for it OP.

I live in an ex council house. It was all we could afford. I like it although as it was bought from the council years ago the standard of work that had been done since was very poor. That could have been an issue with any house though.

You’ll be partly responsible (along with neighbours) for any communal repairs which could include the roof, stuff in the hallway so leaks etc. If you don’t get on with the neighbours then disputes could arise, this is what happened to my mum when she had leasehold. There is also the leasehold ‘rent’ which you’ll have to pay. It may be fixed now but the person who owns the leasehold could sell it on and raise the leasehold amount and you can’t predict now what it will rise to. Also, is it a long lease? If it’s long and you don’t plan to live there for long it may be easier to sell. If it’s short then it may be harder to sell. I also just got from your post that this isn’t your dream home. HTH.

What are the likely service charges for it? I have heard of people buying ex council then getting large bills for refurb projects.

We bought our ex council house in London. It's a bargain for the square footage and put us on a road and in a school catchment that would have otherwise been totally out of reach. Estates vary but ours is well maintained and quite green. The council do maintain it pretty well and although the service charge does annoy us a bit you can see where it goes. I love not having bins outside the house and the fact that our front door is on a path rather than a road.

Several of our neighbours have various sheds, garden pods etc so I would guess that's ok.

Not tried to sell yet so we'll see how that goes but others on the estate seem to have managed it.

I'm getting details today, but it appears to be a private garden. It's described as "sole use" on the listing.

I agree that Victorians are nicer but ex council places are often quite spacious, especially if from certain periods. What kind of building is it? I think a high rise is different from a maisonette or flat in a smaller building. Being mortgage free sounds amazing but presumably your other option is a fairly small mortgage, in which case how does that stack up against lease/maintenance costs? Is it possible to get hold of documentation of the management company meetings to see if any big works are in the pipeline?

@DulseSeaweed it has its own entrance and I don't think there are any neighbours under or over. I'm not sure why it's described as a flat tbh, as it seems more like a maisonette or terraced house.

Nothing wrong with leasehold per se, esp with a flat
However, you need to find out re upkeep of communal parts, the roof (all flats usually liable), parking gardens, painting etc.
Large blocks which are not council have a monthly charge which forms a sinking fund. This is held by a management company and pays for repairs and maintenance.
Issue can be if the block is either small or still council that money is not put away over the years against big Bill's so you might face them as they come along

It’s like anywhere else I suppose. Take a wander at different times of the day and week. Is there a school/doctors on the estate too? Parking?

As someone non-native who used to rent an ex-council flat (from a private landlord, but there were still council-owned flats in that block).
Yes, it will be assumed that you are a social tenant. For the first gen immigrants it does immediately come with a "hey scrounger, came here for our money" attitude. Apologies for being blunt.

@forinborin oh, that's rubbish. Thanks for sharing your experience.

We own an ex-council flat. It's in a small block of 20, 19 of which are privately owned, and on a quiet residential street of non-council housing. We feel no stigma, and think we snagged the bargain of the century. The price will probably go up less than neighbouring non-council flats, but it's at least £200 000 cheaper (central London) and so will appeal to other buyers like us in future. Also, the Council's service charges are sensible - only around £100 a month. Other freeholders in central London charge astronomical service charges.

But I don't think your heart is in this and you actually want the Victorian terraced house.

I inherited a leasehold flat, not ex council
There is a service charge
This covers heat and light of communal areas, building insurance, repairs to the outside of the building
The service charge has increased each year
I would not buy another leasehold flat for this reason

I'd buy the flat.
Council places were usually bigger and better maintained than private places.
Leasehold is the norm for flats, some are 99 to 999 years (so longer that you'd need!).
It is hard to get a mortgage if a lease is less than 70 years, but you can usually buy an extension (I know you are buying cash but in the future your new buyer may need a mortgage).
Check service/maintenance charges are not too excessive.
Go for the flat and enjoy your money!