Sell house in bad condition and buy flat in good condition?

[KettleOn919]

What would you do if you owned your house outright, but it was in terrible condition and you knew you didn't have the time, mental fortitude, organisational abilities or, most of all money, to sort it out?

And you had reached an age where there was little hope of you ever having much more money than your current meagre-ish life savings, which aren't enough to even begin to sort out all the things that need doing?

I've been in this place for twenty years now. It's a little two bedroom cottage in a lovely part of East London. The things that are wrong are a combination of lack of maintenance and suspected serious structural damage caused by the previous owner in the 1990s who knocked out walls, chimney breasts, stairs etc in an effort to make the place open plan... this would have been before regulations came in. There's loads more: rotting windows, sagging floors, possible asbestos, leaky plumbing, half the lights don't work, badly configured rooms... the list is endless. Really, probably it needs gutting and starting again.

I won't go into why I bought this dodgy property twenty years ago... I can only say it seemed to make sense at the time. Now it feels like the worst mistake I ever made. Since I did, I've faced the death of the relative who was going to help me sort out the place, redundancy, a scary medical diagnosis and umpteen recon surgeries. I'm now working part time and helping to look after very elderly parent who is an hour away by public transport (I don't drive).

I can't take this stress any longer. So...am I crazy to be considering selling my house off as a project for someone who knows what they are doing and has the money to do it? To buy a snug, affordable flat instead, where all I'll have to worry about is what colour to paint the walls? I don't think so, yet everyone I talk to (including aforementioned elderly parent) tells me "You're getting rid of a FREEHOLD property and buying a flat? You're a fool!!!

I'm not a fool, am I?

Yes, definitely a job for a developer – can't imagine anyone else taking it on.

Oxford, a lodger is out of the question given the obviously desperate and quite possibly dangerous condition of the property!

Thanks for you input, everyone. I'm feeling a bit better about things now.

People sell houses and buy flats all the time in London as they get older and don't need as much space. There is nothing strange in moving from a house to a flat.

With all the issues, is the property even mortgageable? That could massively lower your market and price.

A thing to bear in mind is that selling to a developer, it'll need to go for a rock bottom price to make it possible for them to turn it around and make money. Will you even make enough money to fund a nice done up flat in a well-managed, desirable block?

And personally, I'd look into raising funds and appointing a professional architect or project manager to sort the house - I wouldn't be surprised if doing that will yield 100k+ more than selling it crumbling.

Thanks for suggestions JoJo, but there is no way I can raise enough funds to appoint an architect and project manager, let alone have extensive work done to rebuild.

I am late fifties, single income, minimal life savings, work in a creative but not well-paid job, have increasing responsibilites to an elderly parent, am a hopelessly impractical person, and desperately need to reduce my life stresses, not increase them by taking out loans etc.

You are right though... it's probably going to go at a rock bottom price.

I would take all of the uncertainty out of it for you and any potential buyer by paying out a few hundred quid for a structural engineer to confirm (or not) if anything is structurally wrong and a ballpark to rectify.

Then you will know exactly where to pitch the price.

Having a recent survey and structural eg report will give buyers confidence to consider the project.

This is all you need really - the stuff you cant see. Most properties over 30 years old will need a rewire and a new boiler and everyone knows the cost of this. Windows are obvious and easy to price. Roof and and structural issues would need to be fleshed out to see extent of any issues and then costs.

As PP have said many, many people looking for a do-er upper in East London. Def sell it on and get your life back.

Wow. How sad for you OP. Estate agents are sharks, and before anyone jumps on me, my son is one. Much to my disgust..
Have you got no-one at all to help.you make decisions?
I think as someone said upthread get a surveyor in first and find some good financial advice. I hate to see people getting ripped off.
Hide your vulnerability as much as you can.
I am almost in the same boat.

OP, a house wanting totally gutting in a nice part of east London is still extremely desirable! Round here (se London) you don't get a missive drop in price for that- people are desperate to gut places! Find some nice, independent estate agents who are less likely to be sharks. I'm sure you will make excellent money.
Are you somewhere cross rail will affect? If so, might be worth waiting til next year, and you will gain even more I expect (although flats round you will also go up of course)

I reckon Another20's advise is good. Perhaps at least pay to understand the structural problems and cost of rectifying (or possibly consider putting that straight).

Things like windows, rewire, new kitchen etc are those that even a first time buyer might be inclined to take on (I did that as a single girl with no prior experience whatsoever) but structural issues could be a massive red flag so it'd be great to have sth to put people's minds to rest and avoid narrowing your potential market to developers with cash.

As PP said in London especially fairly central London people are quite likely to want to gut a place and redesign and modernise it when they buy anyway, so you might not have an issue. I completely understand you not wanting to do a major refurb to sell as the money and stress and upheaval would be immense. It’s not always about squeezing every penny out of your property if going will massively improve your quality of life. Is it an older property in a now trendy area of East London?

I’d get on zoopla and look at PST prices in your street to see if anything sold in last year or so to get an idea of prices. Also ring 3 estate agents and get them round for valuations based on the property as it is in need of renovation. Make it clear this is to be reflected in the price to avoid people doing a survey and asking for big reductions. Maybe even if you can deal with it get a builder/surveyor in to assess what needs doing. But estate agents should be able to value it based on its current condition. Good luck!

Can you sell and move in with mum?

I own a leasehold flat in London.

Problems with flat: noise problems from next door flat and flat above (you wouldn't believe the noise that a 2yo can make jumping up and down above you).
Also, the cost of major works (which the freeholder can choose to do at any time): the freeholder decided the windows for the whole building needed redoing and roof needed replacing - I ended up with a £20k bill for that (they had a large commercial contractor do the work - would've been half the price with a cheap local builder).
Then they replaced the lifts (had to pay despite living on ground floor) - £5k bill. Now it's the external electrics they're doing and later it'll be the outside drains. My service charge is £95/month.

So, don't expect to be any less stressed in a flat!

Why not get the structural engineer & electrician around and see how much it'll cost to rectify. Maybe you could remortgage and pay off the required work over 20 years - may only be a small amount/month on a mortgage. You may also find there are cheaper ways to fix things - eg. Maybe 2nd hand window frames to replace the rotten ones?

When it comes to retiring, the house will be worth loads more than a flat, so you'll have more money for retirement.

Why don't you get 3 or 4 estate agents in to see what they suggest about pricing and also ask them if it will be beneficial for you to pay for a structural survey. I live in the North West, but from what I have seen and heard there is a market for doer uppers in London.

Don't listen to other people suggesting you do it up yourself, it sounds like you have enough on your plate without adding more stress to your life. Sell up and enjoy your new home, you will feel a million times better.
You did mention the only place you could afford another decent house would be in one of the worst parts of London, where would that be, could it possibly be one of the parts that's on the up? There are some area's my parents would not have considered living in, that are now very desirable.

In your position I would sell OP. I also couldn't live without knowing if there is asbestos or not!

Have you considered auctioning it rather than going through traditional estate agencies? If it's pretty and in a good area, it will get a lot of interest and you will get people in the room competing for it rather than an estate agent just trying to flog it to his mate.

Would it be possible to buy a small modern house instead of a flat ?

Think ahead. How long are you likely to be working? Where might you want to retire. How close are you to Crossrail?

Crossrail will have a huge impact on parts of East London. This can be quite a slow process. Renters move in attracted by short journey times, High Streets and leisure offerings improve, families start buying, schools and public realm improve.

Transaction costs when moving are high. You will have no problem selling a doer-upper in a good/improving location. But do you want to spend two sets of agent and solicitors fees, if your plans are to retire elsewhere.

I am a landlord and own both freehold properties and leasehold flats. My experience is that maintenance of freehold properties is not more expensive than service charges on leasehold flats, and that not many block management companies are very good. There is also always one problem resident in each block. Either Victor Meldrew's grumpy cousin who gets worked up about bins, the bloke who always leave the front door open, the tenants with absentee landlords who throw parties every Saturday night, or Japanese Air BnB guests looking lost trying to work out what flat they are staying in. And this is without someone truly obnoxious or wooden floors above. All those people might live in your street but they are far less of a problem if you are not in the same building.

A bit rude but it sounds as if the house, and it's maintenance, has become a focus for your anxiety. If you were to adopt a five year plan, would that help? Equally there are a number of property maintenance companies. I don't know if you could research one that is good and decide what tasks are urgent and get a quote. At the same time find a friend to help, invite 4 local agents in at 30 minute intervals and interview them about the property value, who you might sell to, prospects for the local property market, sales commission etc. This will give you a baseline for your options, plus an indication of which agents you could work with.

needmore that all sounds wise!
I'd add that I would imagine crossrail will push the value of flats up first, as it attracts young commuters. And that a flat in a good part of London is always going to be an excellent bet for renting out, if you decide to leave London when you are older.

Thanks again everyone for your input. Lots of different advice to consider!

Needmore, you are completely correct (and not at all rude) to suggest that the property has become a focus for my anxieties. But aren't property maintenance companies something landlords use to deal with the ongoing upkeep of their properties? That is quite different from my situation, isn't it?

Crossrail isn't an issue, by the way. I'm in a nice (some say "naice") area that already has the tube. Or are you saying that I should consider moving to a cheaper area on the assumption that prices will rise sharply in a few years' time? I don't want to do that; I want to live somewhere safe and pleasant NOW. I ain't getting any younger!

You really need to do your homework BEFORE you get the EAs around.

All that you need to do is research SOLD prices of similar properties in surrounding streets on this link:
www.rightmove.co.uk/house-prices.html - then you will have clear idea of the ball park value.

Don't let them sense your anxiety, vulnerability or stress or they will rip you off. Note that sometimes they massively over value just to get your business (and then you waste months on the market with no viewings before reducing) or they suggest a very low price to shift it. If you give any indication other than confident indifference they will promise to shift it quick to their list of developer mates sat in the wings.

So - play it cool. You have a freehold house in a desirable part of London. This is gold dust your have one chance to get it right. Getting it wrong outs you £££££££££££££'s out of pocket.

So spend some money up front on an independent structural engineer to get an idea of any issues and costs to rectify. Then you just deduct this from the average SOLD prices (minus a bit for disruption).

If you tell us the type of house you own and 5 nearest streets - posters on here will give you a realistic idea of its value (not including what the SE will recommend obviously).

Good luck to you. Life is short so move on - but don't feel stressed that you will be ripped off or undertake too much - if you are informed you will be fine and will be living in a lovely perfect property in no time!!

What i meant by Crossrail was that the prices of properties close to stations will rise relative to those elsewhere. Moving is probably a good idea, given it is clearly getting you down. The question is timing. It may make sense to hang on for a year or two if that buys you something better.

Plus it is worth having a five or ten year plan. Buying and selling is not fun, so it is worth considering what your retirement plans are. One option might be to sell the house, buy somewhere outside London where you might retire to, and rent something, if that works out cheaper than paying two sets of stamp duty.

Try putting a note through the doors of the one bed properties you mentioned nearby.

Someone might want to do a swap with you and take on a project. Makes for an easy move.