AIBU to be gutted my house has lost me money?

[Hotpinkparade]

I guess I’m really wondering if anyone else has been in this situation and what I can do… I bought a two bed flat in a nice area of London in 2017. Redecorated, replaced the kitchen and bathroom, and have lived here happily since.

We’re starting to outgrow it and decided to get the flat valued and see what’s out there. Two valuations, both for the same as we bought it - maybe 5% growth if we’re lucky. I’m just gutted. With inflation over that time, we’ve essentially lost £200,000. The estate agent said house prices in our area haven’t gone up over that time because it’s not ‘up and coming’, it came up a long time ago and has stayed desirable. What do we do? Just suck it up and sell, or wait and see if anything changes?

How could you not decorate how you want, but put in a new kitchen and bathroom? Or do you mean the outside of the property?

We were forced to put carpet down in the flat under threat of forfeiting our lease if we didn't. Despite the flat having hard floors when we bought it, and being on the ground floor with no one living beneath us. There are also a million other covenants, permissions we have to seek to make any changes, only allowed a specific brand of expensive windows, etc etc.

only allowed a specific brand of expensive windows

Out of interest, did the other part owners pay something towards cost of the window replacement?

No, it would just be our cost if we wanted to replace our windows. Which we do, as they are single glazed, most of them no longer open (or the ones that do open don’t close properly), and starting to rust. But the quote to replace was £20k and has probably gone up since we looked in to it, so we’ll just shiver instead!

Sorry OP, I actually thought anyone buying a flat would have done their research and knew they didn't hold their value like a house. Also flats are leasehold so that's another disadvantage. As the leasehold runs down it's sometimes harder to get a mortgage without buying a longer lease. Obviously I don't know how many years you have left on your lease. It sounds as if you might have overpaid. Can you hold on to it until prices rise a bit more?

OP

We have secondary glazing on some of our windows, which is a pane of glass fastened inside the window. Might be worth looking at because it wouldn't impact on the appearance.

Hmmm quite hard to find a two bed flat with private outside space in Hampstead or Belsize Park for that. I think it might be worth a third valuation....

I think you’ve got this the wrong way round!!
especially since you bought in cash . If you had held onto the cash in 2017 instead of buying, your cash would now be worth much LESS due to inflation.

plus as many other have said - you’ve had all these years of not paying rent or mortgage, which surely means you’ve been able to either save or live well on your income

I think it is likely location dependent because I bought a 3 bedroom btl house with some inheritance in 2016 in the West Midlands. DH did some work on it and I had a new kitchen and bathroom. It's more than doubled in value and I've been repaying additional mortgage off every month because mortgage rates have been low and now I've only got a little over £62k left to pay on it to clear the mortgage.

Have you tried arguing that it isn’t a ‘want’ it’s a necessity in order to adequately ventilate the flat and maintain it, state that mould could develop which could harm inhabitants and damage the property, also windows that don’t close fully are a security risk and could possibly endanger lives

I’m sorry your husband’s medication is so expensive.
£700 is so much money. I hope he’s going ok.

Your inheritance has basically provided you with a home. It hasn't risen in value but not fallen. It's a home. Move if you want to another home. Free homes don't come to many.

So now you are jealous someone made money but not you, because you expected to also make £300000. You need to let go. Why does it make you sick someone was fortunate because they bought at the right time (and you didnt).

Okay chill out. I was asked why I didn’t know I wouldn’t make money on the flat. I pointed out that the previous owner made plenty of money on the flat, so how was I to know the same wouldn’t happen again? I didn’t expect the flat to carry on doubling in value forever, but I did expect it to rise in value over 8 years. Lesson learned.

’Making me sick’ was perhaps a strong way of phrasing it; I guess it’s in relation to people suggesting I’ve overpaid, so it’s a bit galling to look back on.

Agree, that doesn't sound right. The overall picture is of properties not increasing in real terms, but there are surely going to be loads of areas that buck the trend given the massive social change since then.

We also bought around that time and it's increased about 25% in real terms, having done not much bar paint and not been very clever about anything. Still not a very expensive house, granted, so 25% in real terms is a lot less than it would be elsewhere.

Unfortunately I could write a whole other thread on the unreasonable attitude of the freeholders! But their answer to such a plea would be (and is) - you’d better stump up and replace the windows then. Not their problem that we can’t afford the exorbitant cost.

That's what I thought.

How? Can you explain your maths OP?

The problem is flats just don't go up in value as much as houses and in London, there's plenty on the market so demand is lower. There's only so much you can do with a flat, whereas you can extend in a house, and if you have a garden it's worth more.

If you've not made a loss, I'd sell up and buy a house. With the new renters rights, there are plenty of landlords selling up now, more choice. Good luck.

Exactly this. You may not have made profit, but presumably the next place you buy won’t have either? So you can still afford the same home?

Id much rather be moving up the ladder now than down.

You may not have made profit, but presumably the next place you buy won’t have either? So you can still afford the same home?

It's harder to climb up the ladder

https://www.standard.co.uk/homesandproperty/buying-mortgages/upsize-flat-to-house-price-difference-london-b1213421.html#:~:text=It's%20becoming%20increasingly%20difficult%20for,faster%20rate%20than%20flat%20prices.

With a service charge like that, it's unsurprising that the value has remained stagnant. That would put off most buyers.

People are preferring houses or at least share of freehold flats currently due to the unreasonable service charges in leasehold flats. FYI a friend in a lives in a large shared of freehold flat in London and each freeholder puts £50 a month in the 'kitty' which easily covers everything, with money left over. There is no justification for £4k a year! Quite rightly, buyers are voting with their feet.

It may be the service charge that’s limiting your market. On top of a mortgage (or even if mortgage-free), buyers will have to she’ll out £4k a year. Thinking about your market it’ll either be first time buyers, singles/couples post-divorce/downsizing or landlords/someone buying as a pied-à-terre/second home/holiday let. The latter will likely be put off by the service charge, as it’ll eat into their profit.

Savvy first time buyers go for places where they can add value and sell at a profit. Yours won’t appeal to them as you’ve done all the work. It also depends if the improvements you’ve made are to most buyers’ taste or if they’ll feel they have to replace things, which is more cost and hassle.

Ask agents who the most likely buyers will be and present it in photos to appeal to that market or as wide a market as possible, e.g. add a (mocked up) single bed or desk rather than a cot in a second bedroom.

See what other similar places have recently sold for. Sometimes agents underprice for a quick sale, as their commission is a percentage, so £10 grand here or there doesn’t matter too much to them. They’d rather get more sales through the books to pay their costs.

Yes, rather agree with this. The repayments on a £500k odd mortgage (assuming the buyer has a decent deposit of £100k+) will be pricey enough without adding on another £330 a month for service charge. Not to mention the requirements for work on the windows etc.

How much would 8-9 years' rental in a flat of equivalent size and standard have cost?