Please help me choose a flat in London: 1 bed ex-council flat in Camden, London or 2 bed new build in Ware, Herts

[ldnflatbuyer2021]

Hi,

I am starting to go insane trying to make one of bigger decisions in my life !

I will be staying in London for at least 2-4 years - and will either sell the flat or keep it rented while likely moving abroad or renting somewhere else.
So basically my most important thing is trying to keep value for at least the short-term (next 2-3 years) !

After a lot of viewings, my two main options are:

1. Ex-council 1 bed flat in central Camden (small, well maintained block) - £385 000

PROs:

• excellent, excellent location
• seems like flats in this development have sold previously for much higher prices meaning this is a good price point - also compared to other nearby properties
• low ground rent / service charges
• lively area with lost of things to do

CONs:

• whilst good sized overall (>45 sq.m.), it's still somewhat small for more than 2 adults and one very small baby
• needs a lease extension soon (likely costing £10k in total)
• council as leaseholder - which can supposedly be problematic with big repairs
• half of other flats are council tenants
• I don't know if the city center exodus has stopped or will keep going?

2. Newish build 2 bed flat in Ware, Hertfordshire (smaller block) - £315 000

PROs:

• everything is new
• allocated parking - which you could perhaps rent out
• very high demand in the area at the moment due to everyone moving to suburbs
• about 40% cheaper per sq.m. than the 1 bed flat in Camden

CONs:

• ground rent increase every 5 years with RPI - will go over £250
• bad management company - all bad reviews, relatively high service charge for such a new block
• bad lease terms such as restrictions like no dogs, license to have a cat
• flat could be of shoddy quality, I've seen issues with it mentioned by others

Camden. London will recover value much more quickly - every time there is a slump you see this.

It sounds great value to me. We sold a zone 2 1-bed in 2015 for £370K. Prices subsequently rose and if they’re back to 2015 levels they’ll go up again.

If you think you might want to rent it out too, there’s always a market in central London.

Easy decision in my opinion!

@TabithaTiger

Location, location, location. Taking everything else out of the equation, where would you rather live? There's a huge difference between Camden and Ware, they're like chalk and cheese. For me, it would 100% be Camden, but where do you want to live?

Also this.

If investment is the long term goal then Camden. Two teaching hospitals in close proximity plus Bloomsbury with multiple universities means you will likely always have tenants. Also, whilst you have a small baby the facilities and things that Camden is able to fund as a central London borough are fantastic plus you have Regent’s Park, Heath and Primrose Hill depending on whereabouts.

I am actually starting to care less and less about location, starting to live a boring life...

Ware is a very nice market town, much nicer then most areas in London outside zone 2 (not all of course) but definitely not nicer than Camden.

Also the price per sq.ft. is also 70-80% higher in Camden then Ware ...

So why not investigate a lovely area where you could afford a house? Or a great area of London where you could afford a bigger flat?

Yes I agree if location isn't so important look at a house. location has become less important for me too

@DottySpottyZigzag

So why not investigate a lovely area where you could afford a house? Or a great area of London where you could afford a bigger flat?

To be honest, Camden is the only location in London that really suits us.

If we were to move out of London, it'd Hertsfordshire.

I am hesitant for my DP and us to buy a house since if we sell it after a shorter time we will pay such a high stamp duty for that duration OR if we want to rent it out, the yields are so low you need to sell it...

Imo a house is more likely to hold or increase its value.

Am not clear how your reply to me relates to the points I made - ?

Also if you’re becoming less bothered about location then there are definitely options other than the two you’ve outlined. Is there some reason you are so intransigent about them?

Can you link both properties for us to look at

Ware is dull def Camden

Neither. You have a baby so need two bedrooms. You will go crazy in a one bed. I'd try and find a maisonette somewhere else with outdoor space. Its invaluable with kids. Or even a small house in zone 4. Keep looking

A small 1 bed flat is really not suitable if you have a baby. Also, a lease extension is likely to be £20k+, rather than £10k. Councils often charge very high sums for major works in their blocks so Camden could be an expensive option.
The Ware flat sounds better value and more suitable for your family but is likely to be harder to rent out if needed in the future.
I am sure there must be other more suitable property around.

@Bathshebahardy

A small 1 bed flat is really not suitable if you have a baby. Also, a lease extension is likely to be £20k+, rather than £10k. Councils often charge very high sums for major works in their blocks so Camden could be an expensive option. The Ware flat sounds better value and more suitable for your family but is likely to be harder to rent out if needed in the future. I am sure there must be other more suitable property around.

@Bathshebahardy The lease extension for the Camden council flat is around £10k. On the other hand, the new build in Ware, with current terms - in 35 years or so - would probably be 20-25k.

@gibletjane - I think flats have a bit more potential in the short term, given how houses have grown 10-20% over the last year but flats have remained static even though the demand in home counties around London is still incredible.

Everyone else - thank you. It's true - none of these is perfect. But I've just been searching for too long and will never find a perfect place and just keep renting forever...

where are you commuting to? that should be a MAJOR factor in the decision. both for cost & timing.

I'd probably prefer Camden but 45m2 is tiny for 2 people + baby. There must be other options on some train line between Camden and Ware which could work?

The flat in Ware has what is classed as onerous ground rent terms - rpi increase every 5 years is not good and once reaches over £250 you will have a problem selling in future. Don't touch a property where you have a bad managing agent. Be prepared for possible rapidly increasing service charges.
With the Camden flat, I echo what other posters have said about possible major works demands (section 20s) landing on your doormat.

Also just to add, a lot of lenders will not lend on 5 year g/r increases and/or where the g/r will be over £250 at some point in the duration of the lease. There are legal reasons for this. (Within London it's the same issue if g/r becomes over £1000 at any point in the duration of the lease).

Why would you but a one bed flat when you have a baby? The baby is going to turn into a toddler before you know it, and if you're still sharing a bedroom it's going to be a pain. And where are you going to keep all the toddler stuff? As babies grow up, the 'stuff' grows with them. For goodness' sake, if you're buying, buy something that will last your family longer than five minutes.

In what world is Ware in London??

@20questions

Also just to add, a lot of lenders will not lend on 5 year g/r increases and/or where the g/r will be over £250 at some point in the duration of the lease. There are legal reasons for this. (Within London it's the same issue if g/r becomes over £1000 at any point in the duration of the lease).

The GR is currently £250 as in the initial lease for a new build. I was told that it just increases along with Retail price index (RPI) every 5-15 years (most likely 10). Since this is outside of Greater London - GR is above £250 so I guess after the next review it will be at least >£300.

But I thought it wouldn't be an onerous ground rent as it's still

I wouldn't live in a one bed with a baby.

What's the cladding situation in Camden??

The Camden flat sounds the better deal, but comes with the risk of high repair bills. Less of a risk if you only plan on owning it for 2-3 years. There will always be a demand for well built property in Camden. But you have a baby, so it's not practical, and will become less so as your baby grows into a toddler..

Lots of new build flats are overpriced; this is probably why the Ware flat resale price is lower than original sales price despite the market increasing. I really dislike ground rent, and having to pay it would piss me off each time I had to do it. No other country expects you to buy a flat at a huge cost, and then get milked for ground rent because a greedy developer wanted to trouser a bit extra by selling the freehold. Some developers have finally been shamed / threat of Govt. action into dropping ground rent from new sales.

But if it's a choice between the two, the Ware flat is the more practical option.

As others have said though, does it have to be this choice or could you look for something else, e.g. a small house?

Don't get hung up on the investment potential of Camden vs. Ware or flat vs. house as - no-one really knows which way the market will go, so concentrate on finding somewhere that works as a home not an investment. (I know I'm contradicting my first sentence somewhat.)

Have you looked at Bishops Stortford, Sawbridgeworth, Old Harlow
BS is further out but it is a nice town

Ware is not london.
Completely different lifestyle
Where do you work?
Where will the childcare be?