Help me solve this mystery

[gettingtothebottomofit]

There's a flat near me that's been for sale but not sold in forever and I have no idea why. I'm not related to it, no idea who the owner is, but I look at property in my area regularly and it's been up for ages and often with multiple agents. Every time I look at it I'm tempted to buy it as a rental, but I figure there must be something wrong with it that I don't know about.

First sold in 2004 for £215k. Now, over 20 years later, they can't shift it at £200k.

Service charges seem reasonable enough.
Nearly 1000 years left on the lease.
On the edge of a highly regarded historical private estate.
Private gated parking spot.
Lots of amenities within a short walk, plus a short walk into the city centre.
Not many neighbours - I think there are 5 other flats in each building.
Cheaper than other flats in the nearby area - there are ones further down the same road at over £100k more.

It's on a road but not a huge one and it's a road that's a lot quieter than it used to be as a few years ago they introduced a bus-only thing a lot further down near the city and turned a chunk of it into a cycle-only lane so people avoid it more. Enough to make it less congested but not enough to make it annoying for residents.

I have a friend who owned a flat in one of the other blocks a few years ago and he didn't know of any problems.

Looking at the other flats in the same blocks, they've all struggled to sell and haven't increased in value - they've decreased a bit in the last 20 years - but literally no idea why. It's just those ones, there have been other new build flats in the area and they sell easily.

There are even some studios elsewhere on the road that are rented out for £1k/month for one tiny room but landlords are clearly avoiding these specific flat blocks and have been for 20 years and I have no idea why.

I bought my current property, the same size but a house rather than a flat, in the same area, at £180k in 2008 and now it's worth nearly £100k more than this flat even though it should be worth a bit less.

https://www.rightmove.co.uk/properties/157294160#/?channel=RESBUY

Help me solve the mystery? Why wouldn't you buy it at £200k, or what am I missing?

Bad or nuisance neighbours?

It is close to the river -.is insurance high?

I would say its the £2K p.a. service charge. So many have gone up around my area and I wouldn't touch it as mortgages are expensive enough atm, Its a big chunk extra pcm on a flat

If other properties in the building aren't selling or selling for less than you'd expect I imagine some kind of costly repair/remediation work needed with a dispute over who is paying for it. Could be fire safety related even if not cladding.

Also an EPC D on relatively new flat will be off putting to prospective landlords as that'll need to come up to EPC C in the next couple of years and that can be challenging to achieve on flats.

@gettingtothebottomofit are there any traffic schemes or large infrastructure projects coming in the next few years?

Wait - is this the same estate agent selling this flat? Maybe he’s trying to make you so curious you book a viewing, and then he’ll murder you as revenge for uncovering his secret. Don’t go there!

I think it's service charges, possible extortionate ground rent, possible cladding or something else that makes it not easily mortgageable, to do with the construction maybe?

There is a barn conversion near me that has been for sale for almost a year now and has recently reduced the price from £1 mil to £750,000
I suspect the issue with it is several fold. There is a business in one of the outbuildings which has a few years of it's tenancy left to run.
It is surrounded by fields and I suspect access is required through the land to access it.
They have now added to the particulars that they have existing ‘overage’ provision on the title relating to any change of use to residential which to me says any increase in the property value will earn a payment to the previous owners. I can't imagine many people would want to have any part of that. It's a shame as it's a gorgeous building which could make a perfect home

Has anything awful happened there?

Oh had no idea about that, definitely plausible.

😂

He probably has had it listed tbh, everyone else seems to have listed it at some point so doubt he would miss out!

I don't think so but I haven't looked into it so will check. There's a building project starting further down but is much much nearer to other flats and hasn't affected them selling (so far anyway).

It's a canal with a 1 in 500 year flood risk, I have a commercial property a similar height closer to the edge and it's not super high insurance or anything.

Haunted. Probably a poltergeist that's deeply in love with the current owner and throws things at anyone who goes to view it, or produces ectoplasm all over the walls.

Restrictive covenants maybe?
I would not be happy using an unsupported balcony!

Re the story, Basically it was a local author who wrote a fiction novel about an estate agent murdering people. At the end of the book it says in the notes that it was fictional but inspired by a friend's property hunting story. I went to view a property in that area soon after because it was a place we'd looked at a few properties in before. Making conversation because it was a weird coincidence I'd picked it up off my pile recently, I mentioned it to the estate agent showing us round, who not batting an eyelid said, "Yes, it's based on me. I've not read it but I've heard about it."
So I contacted the author to find out if this guy was really dodgy - obviously I didn't think he was actually a murderer but I also didn't want to give a massive commission to someone who was so annoying/stressful/shady someone had made them into a fictional murderer for their book.

LOL @gettingtothebottomofit - very apt user name then. Thank you for telling your tale. I can't believe you contacted the author. They aren't likely to say yes I based it on him hes a dodgy geezer and I'll just sit here and wait for the libel writ to be served on me are they?

I bet the estate agent was just lying to make himself seem more important. Estate agent in exaggerating facts shock.

it's ugly.

Could be they don't want to sell for some reason.

There was a house we liked the look of and could afford. Someone warned us not to bother because it belonged to a divorcing couple and the man was trying to scupper the sale to screw over the wife. A year later, some friends excitedly told us they'd seen the perfect house and could afford it. Yep, same one, still in limbo.

Similarly, I went to view a flat and I thought it was odd the estate agent didn't bother coming with me. The owner cheerfully told me he'd already 'sold' it five times previously but always pulled out just before exchange as he hadn't found anywhere to move to. I met the owner's teenage son who had been waiting for his dad to move somewhere he could have his own bedroom - for years - but he never went to view anywhere.

My guess would be something is showing up on the survey that may/may not be down to the caves but would require major work being done in the not-to-distant future.

The two grand a year service charge is probably too much for many people for a flat of that value.

Escalating ground rents possibly, or a big s20 major works cost coming that's not covered by reserve funds held. If the property has a lift, for example, that major overhaul work hasn't been budgeted for, it could mean that big bills are coming.

The £2k service charge doesn't seem too bad, but there may have been warnings from the managing agent that it needs to go up to cover insurance and future major works.

I have a client that used to pay £70k per year to insure their block but now, post Grenfell, that insurance is over £200k per year! All has to be paid by the leaseholders.

If you're really interested, go and have a look but ask to see the most recent service charge accounts, budgets, correspondence and any s20 consultations that have been issued before you make an offer.

The "estimated" service charge is £2k per year. It could be because they can’t or won't confirm that. The only other thing I can think of is that there is a problem with how it was built, making it difficult to buy with a mortgage...

Oh I'm with @AtomicBlondeRose . After reading the local author plot " it was a local author who wrote a fiction novel about an estate agent murdering people" sounds like prospective buyers are being offed. That or a combination of the above reasons...

The vendor will be able to confirm their current service charge demands.

Service charges are, however, always estimated at the point that you're paying them. They charge an estimated amount in advance based on how much they're budgeting to spend. After the end of the financial year, the actual expenditure is determined and a balancing charge or credit is applied.

Then there's the major works contributions. A decent managing agent will do 10 year project planning, all costed out, and will try and collect sufficient reserves over the longer term to pay for the work without having to apply additional levies on lessees.

Unfortunately a lot of it is guesswork. Things go wrong sooner than anticipated or, as has happened a lot due to Brexit, costs have shot up, leaving reserves short and additional demands needed.

I'm not sure if the block in question is affected but the new Building Safety Act is costing a lot of blocks a lot of money at the moment too. A block I know of is spending over £100,000 replacing all the internal fire doors that were compliant with the old legislation, but not the new. That wouldn't previously have been in the major works plan.

It's claustrophobic inside. Not many windows. That would put me off.