Would you buy a flat to get on the property ladder?

[Spagbol78655]

Would you buy a flat in order to get on the property ladder or would you just keep saving until you could afford a house?

I live in a Scottish city where the flats are mainly Victorian with huge bay windows, high ceilings and in great locations. I owned a tiny one alone for about five years then a bigger one with now dh for five years where we had our first dc (having all rooms on one floor is great with a baby!) then we bought a house when oldest dc was 2.

I really like flats. I live in a house now because we’ve got 3 DCs & our old flat was just too small. I’m not a gardener & would be perfectly happy with a nice flat again in the future once the DCs have all left home.

That said, it would need to be the right flat in the right location. And the service charges etc would need to be fully investigated before buying.

But in principle, yes.

The property ladder relies on two factors, an increase in house prices over time and an increase in earnings.

Without either of those (pandemic / brexit / economic / employment crisis needs to be taken into account) there’s a chance you might get stuck on the first rung

Definitely save for a house! I bought a flat with ex and when we went to sell really struggled. He managed to finally sell it recently making a 20k loss.

They already have a £60,000 deposit! How much more saving is needed? The problem is low incomes - for Berkshire. I’m assuming they are not paying rent because in many places in Berkshire this would be higher than a mortgage!

So if there is around £220,000 available, look for a high quality flat. Not high rise and in a great location.

The people who say no are not being realistic for Berkshire. Loads of people downsize to flats when older. Lots of younger people do buy them. They must be the right one though and I don’t know which but of Berkshire you are looking at. Presumably not Ascot where there are very expensive flats! No shortage of buyers either!

The people who want out of rented flats is understandable but if you are just starting out in low wages, they are the way forward. I do think your earnings are low when compared to your deposit but there’s no reason why a flat isn’t a good buy. There’s no guarantee any property makes money right now. You cannot expect this but Berkshire isn’t a bad place to start. Go for it.

Just to clarify: choose a great location.

I've always lived in a flat, mainly because i've lived in the sort of areas where I would never have been able to afford a house. It's really not as bad as a lot of people are making out!! I'd rather live in a flat in a nice area than a small house in a rough area.

Couldn’t agree more!

No I wouldn't, I know I want a house and garden eventually. I'd be worried if I bought a flat wouldn't be able to get rid of it or sell it for less than I bought and wouldn't be able to move on.

Why would you not be able to sell it? Lots of older people like flats. People like the fact they get gardens but don’t maintain them themselves. There are very swish flats in Berkshire. I had a look within 5 miles of Reading and there are plenty of low rise relatively modern spacious flats in great locations. This idea that you cannot sell a flat is just ridiculous. Don’t overpay and keel it in good condition and it’s always important to have it in a great location. Watch management fees and never buy one in a building that needs work.

Most older people buy bungalows

Only a flat if I could buy the freehold or have a share in the freehold. A leasehold is too restrictive; you have a worse situation than renters in some situations as you have to cough up for stuff that doesn't benefit you. And are dependent on leaseholders say so for something you wish to do.

The number of bungalows is diminishing. Lots have been pulled down and houses built. As Land is expensive they are not cost effective to build. Therefore the build cost and Land cost exceed the ceiling price the property could achieve. Looking at the wonderful flats in Ascot and places like Gerrards Cross and Beaconsfield, people like them. Hardly any bungalows to be found! So no. Bungalows in some places are not the sought after property. Just look at Bournemouth!

Plenty of leases are not very restrictive.
Most management fees are for communal areas and gardens. We have never had any problems. Some freehold estates require communal management fees for shared areas. It’s in everyone’s interests to repair roofs, maintain gardens and do necessary maintenance. The worst scenarios are always talked about as if they are the norm and everyone is ripped off. Lots of people are more than happy with flats.

We own a flat (our second). Its one of a pair (we are upper), and we each own the others lease. No fees change hands. They cover drainage issues, we cover roof issues. That's all that's shared anyway. Works very well, our local area is full of this style of flat. Our last one sold within 48 hours. I've no doubt this one will sell well when the time comes. Its huge as well, easily double the size of a house we could have afforded.

Yes. My first home was a tatty two bed maisonette in North London. It had a 978 year lease, an overgrown garden and the worst kitchen I have ever seen.

However, I learnt a lot about managing a mortgage, doing somewhere up and what I wanted next. It was a good buy for me.

No, especially not a leasehold one.

@PresentingPercy what does that mean? Are bungalows undesirable in Bournemouth?

OP there's nothing at all wrong with flats. We're in London and everyone we know lives in a flat unless they're over about 50 at this point and benefited from the housing boom in the nineties.

Clearly lots of people don't live in the really expensive areas, where its a huge stretch to afford a small flat and most people live in flats.

Of course flats have downsides, but property ownership beats renting even with the leasehold downsides. Isn't that the crucial point?

Lots of people can't afford a house in Lomdon and have to save for years for a flat. It's not just a case of save another year and get a house instead. The small flat is a big achievement, over the long term will increase in value and that often gives people the chance to move to a house, often a bit further out where things are cheaper. But in expensive areas, most people start in flats.

As long as you understand leasehold and don't buy somewhere with a short lease or ridiculous ground rent and some kind of controls on service charges, flats can be great. Yes, there's always people above or below, but it beats renting long term.

I guess if you live in an area where a bit more saving means you can afford a house, then it's worth waiting a bit longer. But the reality is that over time prices usually rise faster than you can save and it's often good to just get on the ladder in those places.

Thank you all for your thoughts! I have rented a beautiful flat before so it’s not flats themselves that were concerning me but more the clauses around leases etc so thank you for all your info. As mentioned by the poster above, I’m concerned that as house prices rise, the amount of deposit we can save will not grow at the same rate as house prices and will be worth less and less so I definitely will not rule a flat out

Get on the ladder with a maisonette. It will appreciate faster than you can save as long as it's in a good location, has a garden and it wont be affected by the cladding problem. Prices will just keep rising usually so get on the ladder now. I know absolutely no one who didn't get on the ladder with a flat first.

Just to add, we bought just before Brexit in London and our flat made 25k in 12 months which we then sold to buy a house outside of London. This was in a bad market too.

@Racquelscottish
In parts of Bournemouth you would not find a bungalow! Land prices prohibit only one level. There are thousands of flats and many occupied by the elderly! That’s what I mean. Have you been to Bournemouth?

The dangerously clad flats are simply not on the market! They are not saleable.