Buying a purpose built (1982) flat what do I need to know? FTB London.

[another20]

I am trying to help a younger relative navigate the London property market as a first time buyer. My recommendation was for them to do "watchful waiting" for a year or so during this tricky market - but they want to get on with their life after a decade of renting which I understand...... I expect that they might take a financial hit initially but hopefully it will even out in the longer term.....so I just want to make sure this is as water tight as possible. They have their deposit saved and MIP in place.

I have pushed them to make sure it is future proof - so they are considering putting an offer on a spacious PB 2 bed in a leafy green residential area, right next to a lovely park and zone 3 tube links. It is 3rd floor (no lift) loads of parking and communal "gardens" (but cant imagine you would sit out in it - more areas of grass amongst the car park.

They plan to marry soon and hope to have a child (just the one) in the next 5 years.

What should they be concerned about and research with a flat of this age?
Can they ask for minutes / annual reports from the residents association and/or management committee? Can they ask about a sink fund? What is a survey likely to show up in a block of this age? Can they find out if windows are scheduled to be replaced or other works in the next 5 years - or is this just "sprung" on leaseholders.

What should they be looking for on a second viewing? Noise from flat above? How rubbish is collected/stored? How many flats (80 one and two beds across 3, 4 storey blocks) are BTL, shared ownership, social housing? What Qs should they ask of the estate agent and owner. What else should they be doing - talking to neighbours? Visiting the development at different times of the day/week?

It has a new long lease - anything else to consider?

I'd find out about the service charges and planned repairs, whether it's leasehold or share of freehold. If the first, then length of lease.

I'd also have a long hard think about having a baby on the third floor with no lift and no actual communal garden. Think about carrying the prom up and down, is there any additional storage? You're not allowed to leave stuff in the communal areas. The flat doesn't sound that well suited to what their plans are tbh.

With regards to social housing, do you mean it's ex-council? Not everyone's cup of tea but at least it should be a lot cheaper than comparable flats in the area.

Thanks JoJo - yes I agree 3rd floor not ideal to hump a baby up and down. I will ask them to check if there is storage or a space to leave a pushchair in foyer. The block is directly opposite entrance to a lovely park so hoping that would help?

Also agree that this flat doesn't seem to fit in with their plans and if house prices drop, they may find it difficult to move on when they want to sell. I think a third floor flat with no lift isn't that attractive in a difficult market (which we're likely to have short to medium term). If they can afford a two bed near a tube in Zone 3, then I'd advise looking further out to Zone 4/5 and aiming for a two bed house with a garden.

Thanks MrsP -- it has taken me months to persuade them to consider a a 2 bed in leafy suburban zone 3 than the minuscule 1 bed party pad in zone 2 that they really really want......not sure I could shift them further out.

It is not even as if it is the top floor (there is a 4th) - where they would have the advantage of no noise from above to compensate for the hike up 3 flights. I suppose if they secured it at a realistic price then they could just sell it on at a realistic price?

It is on at £385 and an identical (size and standard) flat sold on the first floor for £375 in Jan this year - so I think that if they did offer it they should be chipping a bit off the price to reflect the difference in value from 1st floor (most desirable floor) to 3rd floor with no lift - as well as a taking into account a slowdown / uncertainty in the market since this other flat went under offer a year ago.

Any thoughts on what would be your highest offer here?

Does it have extension capacity? Ie if third floor is there a loft they can do? If there is a flat above them, is it noisy?
Personally for “future proofing” a flat, I think you’d be better off with a large 1 bed with development potential to go into a garden, dig out a basement etc in a small house which has been split between 2 or perhaps 3, than a flat in a block. Mostly attic conversions have been done in my experience of what friends have bought.

1 Find out who the freeholder is. Local council freeholders and social housing freeholders can be a PITA to deal with.

3 Fire regs will definitely not allow you to keep a pushchair in a communal area. Whilst it might be unofficially accepted, there’s a good chance that the freeholder clamps down on it, particularly post Grendel.

Thanks Alanna - sadly no extension potential as there is a flat above. Need to get them to check noise levels.

I was also keen for them to look at development potential so that they could future proof it financially but in reality they are grappling at the bottom rung of the property ladder in London as it is and there are no significant wage uplifts on the cards that could finance any project in the for-seeable. It is future proofed from a space perspective (large 2 bed - could be reconfigured to 3 bed) and location (quiet leafy residential, good schools, nice park, good transport) - so I suppose if they proceed with the PB one (3rd floor - no lift) - they need to ensure that they buy at the best price (if possible) to offset?

To try and proof the flat against prices dropping, it would make sense to get a property that needs work. If prices drop, they are likely to have made the difference back by refurbishing.

I’d also bear in mind that you can’t just convert a 2-bed to a 3-bed. Might seem like a bright idea to move the kitchen into the living room for example. However, you can’t just to that in a leasehold property. You need permission from the freeholder. It can also get turned down or they might ask for a hefty fee to agree which won’t make financial sense. You’ll even need written permission to change windows like for like. Flats tend to be very restrictive.

Thanks Ruby - I will look into that and JoJo - thats a good point to not assume they could automatically get a 3rd bed.

Anyone want to say what their max offer would be given the context outlined above (ie it is on @ 385, same size/condition flat sold in Jan for 375 but on 1st floor).

I don’t know what prices have been doing in the area but it’s been all slow with prices dropping a bit then I wouldn’t spend more than 360-365k on the property.

If a freehold house is out of the question, how about a house conversion, i.e. one flat upstairs, one flat downstairs. They often come with some outdoor space and there may be a possibility of a 50% share in the freehold.

I don't think a third floor flat would be a good idea with a baby/shopping etc. Also check floor coverings - most flats don't allow laminate/wood flooring (except ground floor).

With a largish block, there is often a Management Company who look after the communal areas. A share in the freehold in this situation is merely 1 share in the Management Company, which would give some say in how things are managed but it most certainly won't mean you own the freehold.

Thanks JoJo thats where I am thinking max should be also.

Zoopla is saying that the other 1st floor flat that sold for 385 one in Jan is now worth 381 - no idea how accurate their data would be.

But it seems consistent in direction at least with ONS tool that showed the borough has dropped 1% between June 2016 and June 2017
www.homesandproperty.co.uk/property-news/whats-happening-to-house-prices-a-year-after-the-brexit-vote-and-10-years-after-the-financial-crisis-a112866.html

Other consideration is that current owner only bought in Jan 2015 and paid £330 (which looks about £10k more than others sold around the same time on better floors) - they also put it on for £395 at the beginning of summer and have since dropped to £385 (end of Sept).

Apparently they have had an offer that they rejected (EA wont say what this was?) and they had found somewhere else to buy but it fell through (don't really understand this as they didn't have an offer on their own).

What area are they looking in? Is the max budget 385 or can they go to 400?

Hi Silver £360k is top looking at NW10/NW2

Oh 360k is tough.

For 360 ibudget t sounds like they have got a reasonably good flat!

Ok I know this is nowhere near NW... but Lee has good schools and the train link is FAST into London Bridge. Also I know it says offers over... but you never know. Period 2 bed with garden. 1st floor so no one above you.

www.rightmove.co.uk/property-for-sale/property-68162921.html

Agree that top floor flat / block not as good as freehold house or conversion.

But, London.

I live in London, I’ve had to make those choices. These are compromises. Even in a falling market you’re not going to get a house or conversion for that price in North London except much further out.

While future proofing is important, I wouldn’t appreciate someone pushing me to move further out, which wouldn’t suit my lifestyle now or in the future (given that I originally want a one bed in zone two!).

There will always be a compromise in London (and in most house buying!) Encourage them to think about what THEY really want. They may well be willing to lug a pram up stairs to live in an area with friends and amenities rather than be stuck out in the middle of nowhere. I certainly have been prepared to do this!

Your questions are all things they should think about, a lot of which will be answered by the freeholders solicitor during the buying process.

Tiglet - I will have a search to see if there is an opportunity to do that with their budget - but I think its unlikely. I think that the 2 bed PB block is still even cheaper than a 1 bed period conversions with a garden nearby - but will check (also they wont have the additional funds to develop).

I think that they just want to get in and nest rather than take on a project. I think that it is future proof from a practical perspective for their personal needs - they are fitness freaks so 3 flights of stairs is attractive. I appreciate that they cannot add value or future proof the PB from a financial perspective - but it would mostly meet their needs. They just dont have the financial capacity to develop.

I just think that their only leverage is therefore to secure it at a good enough price to weather any storms over the next 5-10 years and be able to sell at a realistic discount taking into account 3rd floor no lift when they come to sell on.

This one is N2.... bit of a slog to the nearest station - but top floor (no lift), 3 beds, balcony, nice communal gardens and schools look decent for primary.

Assume they have already seen it since they are looking in N2?

www.rightmove.co.uk/property-for-sale/property-61716121.html

Silver - beatiful flat - thank you - but they need to be W/NW.....

Kylo !! are you my young relative?....Your post is spot on.

I think that I have done really well to drag them kicking and screaming to zone 3. My gut personally and everyone elses on this thread is to find something to develop (or not buy at all right now). But they just cant afford to go this route - they are incredibly lucky to be able to buy anything at all.

I do worry about 3rd floor and no lift and selling on in the future - but if I look through the 80 odd flats in the development many of the 3rd and 4th floor flats have changed hands over the years - so it would sell eventually for the right price to the right person.

Just need to get the offer right - not sure what the owner will hold out for given their circumstances....

Definitely been in a similar situation.

I honestly think the sort of flat you are describing can be a winner, as it means you get a good location for less, when otherwise you may not have been able to buy. I also think this means selling is fine as this will always be the case IYSWIM.

But, that means - it’s essential price is right. I’d find out the sellers situation and based on other sold prices go cheeky!

Silver cross posts - that second one is amazing as well - but they are looking NW2 not N2 as they need to be W/NW.

What about this one - 2 beds. ANW London area. And seems a bit more futureproof....

www.rightmove.co.uk/property-for-sale/property-68506253.html

Plus if you look up to £3400 within 1 mile of NW10 so covering NW2 and surrounding NW London, there are lots more options. In this climate, I would expect you would be able to get a fair reduction (I am in West London and have recently had our house valued and market definitely very open to cheeky offers).

Ah I see the sellers position you put lower down.

Definitely work out a maximum they think it’s worth in the current market (sellers sometimes think just because they’re asking that is what they’ll get...) and then go below that to give them room to negotiate up.

If the seller wants more than it’s worth, it’s frustrating but with that sort of property you have to walk away. But as I’ve said, IMHO if you can get it for the right price - winner.