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!

@HugeBowlofChips if my Victorian falls through, I would give serious consideration to buying outright. I'm a single parent with no family support and it sounds amazing not to have money worries. It's not my dream home, no, but I possibly could live with it happily!

However, you will quickly regret buying leasehold.

So everyone in England who buys a flat regrets it?

Having said that, there is an extra issue to worry about with flats where the block is owned by the local authority, as they tend not to have a sinking fund for major repairs. This isn't usually a problem in "normal" (private sector) flats though.

Maybe the answer would be to maintain my own "sinking fund"

Even if you buy the Victorian house, you will need a personal "sinking fund". When old houses go wrong, they're expensive to fix.

In the process of buying the council flat your solicitor should ask the freeholder to declare if they have any plans for major works. We did, and we know what's coming (it's huge!) but we factored that into the offer we made.

@gelatodipistacchio

Maybe the answer would be to maintain my own "sinking fund"

Yes - which is what people with a share of freehold flats do (or rather, the management board usually collects one on owners’ behalf, through the service charge) and what you’d presumably do if you bought the house you want, for if / when the roof needs repairs / house needs rewiring / guttering replaced / windows replaced etc.

You want victorian house move to Scotland you'll get value for your money.

We own a leasehold and don't regret it but we do pay around £3000 a year in ground rent and maintenance fees. Just so you're aware

The EA has now confirmed that I could do whatever I want with the garden (within reason) and ground rent is £750/year.

The point of this purchase is essentially that I would have a lot of extra cash. £3k per year, or even a huge unexpected service charge of £12k would be easy to manage with this sort of budget.

@Annoymoususer while Scotland sounds brilliant, I think almost all the jobs I am qualified to do are based in London. It's annoying.

I'd never buy any leasehold property. To me it's basically just paying rent up front but for a lot of years, yet not having any of the benefits of being a tenant (repairs etc)

Victorian terrace sounds lovely.
Council estates near us are mostly lovely. Some issues with fly tipping but they do that in the terrace back lanes too.
Roughly what area are you in?

@Womendohavevaginasnick I'm in far East London

Sorry I've no experience of that area but I'm sure someone will

Walk around the area, different times of day and night. Knock on the neighbours' doors for a quick chat. "Hi, I am new here. I am thinking of buying X. What's it like round here?"

We do this with any house we buy. It is very revealing.

Do you mean that the ground rent is £750, or is that the service charge? You'll pay both.

First things to ask,

How long is left on the lease? A short lease will substantially affect the resale value.

What is the service charge, and what has it been for the past five years? That way you can see whether it has increased substantially.

Have any major works been completed in the last ten years? Are any planned for the future?

What is the ground rent now, and is there any clause for that increasing? Some double every x years, which can fast become very expensive.

upkeep of Victorian houses can be expensive -damp can be an issue but a good survey will check for this - make sure it has decent double glazing & the electrics might need checking - does it central heating & what state is the roof in (survey but when you view stand on other side of road & check roof for misplaced/slipped tiles - your nose will tell you if the damp is bad!
What is the parking like & where are the rubbish bins kept- does your neighbour have access over your garden (this shows by having a gate in your side fences)

@Orf1abc oh, thanks. Those are very good questions.

Answers:

160 years left on lease
It really is only £750/yr for everything
No major works planned

I live in a council flat and I love it. It’s spacious, bright and warm. The Victorian terrace I’ve just come out of was dark and cold even with double glazing, insulation and the heating on most of the year.
However I do notice that the building repairs are done to a very low standard, and often have to be done again. The council don’t put jobs out to tender so you can’t challenge their costs. They have their own team of people and very creative accounting. For example, the entry system isn’t very secure, so they want to install a new system and charge the twelve flats £5000 each. We are not in a deprived area, we don’t need that level of security but they make all the decisions with no consultation at all. Something to consider.

I would never consider buying an ex-council and basically fill the pockets of someone who bought the property way below the market rate and sold it at full price.

It's not illegal, but it's so wrong that I can't be involved in it, and lose MY money on top of it!

@khakiandcoral interesting. I don't see how I would be losing money by buying a cheap place though? And tbf I think anyone who bought London property anytime in the past has been disgustingly, unfairly enriched. The sellers of the Victorian are going to be selling for double what they paid less than ten years ago as the area has improved a great deal (and they did do a lot of work on the house, to be fair to them)

You need all those things in writing, including the historical information and the possibility for the ground rent increasing.

Leasehold properties can be a good buy, but if you don't get all the information upfront, you can bet you'll get nasty surprises later on.

And tbf I think anyone who bought London property anytime in the past has been disgustingly, unfairly enriched.

why unfairly? They paid and sold at the market rate. No one subsidised their property.

A rising market doesn't help you when you need to upsize anyway, most people had to stick with what they have or move out.

Again, it's not illegal, but I wouldn't touch an ex-council with a barge pole.

I would be more concerned over possible maintance charges for a former council block . This is the very extreme end , but look into how repairs are funded . www.kentonline.co.uk/thanet/news/council-to-force-residents-to-pay-200k-for-flat-repairs-246287/

@jessycake wow! That is indeed extreme. Tbf this property is neither that beautiful nor historical, and it is difficult to imagine any repairs even touching £200k.

There are some shocking stories about work put on hold when council properties went for sale, and the new buyers being suddenly met with extortionate costs when urgent repair and maintenance had to catch up.

On one hand, I am grateful it wasn't more tax payer money wasted, but on the other hand, I sincerely hope the buyers had done their research properly and knew what to expect.