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Property/DIY

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Flip

Original poster

Flat failed to sale for months, then another one in the block is listed for 6-12% higher

20 replies

Georgist · 10/10/2021 13:55

I'm just curious if you think I'm missing something

This flat was reduced to 424,950 in March. I enquired about a viewing last week and the agent said they are removing from the market (even if at this point they could sell, they had failed to do so for at least 7 months, so I think it's safe to conclude that this price was a little high)
rightmove.co.uk/properties/102640037#/?channel=RES_BUY

This flat has been listed in the same block, with a guide price of 450-475
rightmove.co.uk/properties/114318173#/?channel=RES_BUY

The first flat is share of freehold, whilst the second is leasehold. I think the first flat may be bigger (the second didn't have a floorplan). It has a nice view of the park, whilst the second flat has a view of the neighbouring office block. I think the only advantage of the second flat is that it's on the top floor (no neighbours above), but is that worth an extra 50k?

Looking at other prices in the block I would have thought the first flat would sell for around 400, perhaps a little lower, and the second flat should be cheaper than that. Additionally it sold for 370 in 2018 and flats have not increased significantly, if at all, since then.

OP posts:

Glassofshloer · 10/10/2021 13:56

Which one is yours, op?

Original poster

Georgist · 10/10/2021 14:24

Neither are mine! I enquired about the cheaper one, but was told the vendors are taking it off the market. I viewed the more expensive one.

OP posts:

Elieza · 10/10/2021 14:53

Top floor - penthouses always go for a premium?

Original poster

Georgist · 10/10/2021 15:19

@Elieza

Top floor - penthouses always go for a premium?

It didn't in 2018. It sold for 370, whereas lots of others were selling for around 400-425.

It's top floor, but not considered one of the penthouses. There are two and the agent said they are amazing - I assume they are significantly bigger and have nice views. As I said, this flat had a view of the office block next door.

OP posts:

TheCanyon · 10/10/2021 15:29

The first one has terrible photos, it looks really pokey but when you look at the floor plan the rooms are a decent enough size. The expensive one looks better, probably because it's more modern I guess.

ComtesseDeSpair · 10/10/2021 15:34

The second flat has a much more modern and currently stylish kitchen and bathrooms. The first is looking rather dated and tired. The second also has the loft. I’d presume it’s just that a different agent has valued it differently, having encouraged the vendor to believe theirs is worth more based on the above.

What difference does leasehold v share of freehold make in a block where there’s a mix of both? The freeholders do all the legwork of getting a say in how the building is managed and the leaseholders just sit back and benefit from their work?

Original poster

Georgist · 10/10/2021 15:53

@ComtesseDeSpair

When a lease expires, owners of leasehold properties cease to own them. They revert to the freeholder. In the meantime, the owners of leasehold properties pay ground rent and will probably eventually pay to extend their lease. If they don't it would eventually become difficult or impossible to obtain a mortgage and hence sell.

So, the drawback of the leasehold is you pay ground rent and you pay to extend the lease or accept that the value falls until you case to own it. The advantage of share of freehold is the opposite.

OP posts:

WhatAWasteOfOranges · 10/10/2021 17:24

Share of freehold is also a leasehold property so will have a lease that still needs to be kept etc

Original poster

Georgist · 10/10/2021 17:47

@WhatAWasteOfOranges

Share of freehold is also a leasehold property so will have a lease that still needs to be kept etc

My understanding is if all flats were leasehold and there was a freeholder, the ground rent is paid to the freeholder. But if some flats are share of freehold, wouldn't they receive the ground rent? Or are the flats with a share of freehold entirely separate from THE FREEHOLDER? My assumption was that if there were several flats with share of freehold, that meant they share the freehold and there was not an additional (external?) freehold(er).

I've owned a share of freehold flat in a conversion, where all flats were share of freehold and we didn't pay ground rent, as there was nobody to pay it to. I've owned a leasehold flat (in a modern block) where all flats were leasehold and paid ground rent. Then the freehold was put up for sale and some flats bought a share of it and my recollection is that we granted ourselves a 999 year lease (previously the remainder of 125 years) and ceased to pay ground rent, but those who didn't buy the share continued to have the remainder of 125 years and continued to pay ground rent.

I would be grateful to be corrected if I have misunderstood or misconstrued something here.

OP posts:

Original poster

Georgist · 10/10/2021 20:36

@TheCanyon

What looks more modern? They were built at the same time.

OP posts:

TheCanyon · 10/10/2021 20:59

As I said, the expensive one. Bathroom and kitchen are much more modern

Original poster

Georgist · 10/10/2021 21:10

@TheCanyon

As I said, the expensive one. Bathroom and kitchen are much more modern

Fair enough, but 100k?! They bought for 370k in 2018 and flat prices in Hove have fallen a little since then. Does replacing the kitchen and bathroom really account for an increase of close to 100k?

OP posts:

dalrympy · 10/10/2021 21:59

Both very overpriced.
I know the area very well. Both probably worth around £400k at most.

Agree that the first one is much nicer.

TheCanyon · 10/10/2021 22:14

Don't buy it then? You're right, 400k+ for a pokey wee flat is nuts.

GreyhoundG1rl · 10/10/2021 22:17

Neither of them are necessarily "worth" anything like the estate agent's valuation. You can market your house at pretty much anything you choose, the proof is in the pudding. Or the selling...

Ellmau · 10/10/2021 22:58

Clearly overpriced - but ultimately it's worth what someone is willing and able to pay. So if you like it put in an offer of what you think it's worth and see what happens.

Ellmau · 10/10/2021 23:04

The first one definitely looks bigger, and has a nicer layout (I'm not keen on open plan kitchen-living rooms), plus a balcony, whereas no. 2 has no private outdoor space.

sunshinesupermum · 11/10/2021 09:50

The second flat does have a floor plan. I think both flats are overpriced. The first one because the interior looks very dated and the second possibly because the price is out of sync with similar flats in that area? Used to live in Hove and still miss it. Will you make an offer OP?

Peanutsandchilli · 11/10/2021 10:06

The too floor one has access to the loft space. Storage is always at a premium in flats, so I'd guess that would increase the price a bit. Having said that, £450k for a 2 bed flat is mental.

Original poster

Georgist · 11/10/2021 11:20

@sunshinesupermum

You're right it does have floor plan. But it doesn't state the square footage, which would be useful to compare with the other one. Having said that, I've seen flats on with two agents where there is a big discrepancy in square footage (over 10%)!

I saw two other flats at the weekend and there are several more I'd like to view before making offers.

OP posts:

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