Buying a flat or apartmenf

[NomadicFinnMoose]

I'm buying alone, noone to discuss this with.

What are the pitfalls, particularly financial/leazehold ones, of buying an apartment? I'm aware I need to check service charge and what's included (like buildings Insurance), but what about non-insurance budding repairs?

I don't want to buy, then end up in financial difficulty, or lease issues. I also can't afford to waste time to only find out something that sounds trivial that could stop me, purchasing.

I'd really appreciate any tips of questions to ask, what I need to avoid etc.

Thank you so micj.

Length of lease - I wouldn’t look at anything under 125 years.
Ground rent and the provision in the lease for increasing it. Ideally it should be ‘peppercorn’ as in a tiny amount that can’t increase. Anything over £250 or that has the potential to increase to over £250 and lenders may not give a mortgage - I think the limit is higher in London though.
Make sure that the service charge includes a reserve fund for unexpected issues and major repairs. Your solicitor will check previous years accounts.
Also when you are looking check the communal areas, hallways, entrance doors, windows, gardens, garages if there are any. Do they look well maintained?
I’ve owned 2 flats and have not had any issues. One was a fairly new development but brick built and only a 3 storey block and the other a conversion, share of freehold. I think these types are easier to sell than higher rise which may have issues with cladding and/or fire safety.

High rise is difficult right now due to the cladding situation after Grenfell.

I had to phone two solicitors before I got one that would take on a purchase of a flat.

Basically any building over 18metres is high rise. A flat for sale in any such building should have a certificate of safety for the cladding etc but there are only a few people doing the inspections and it's hard to get in.

Any building over 11m but below 18m is I also now supposed to have fire safety assessments done.

The worry for buyers is that you buy the flat leasehold, it is then discovered that the cladding is flammable and you have to pay tens of thousands to get it sorted out.

I bought a flat in an old building that visibly had no cladding.

Thank you for your thorough and very useful suggestions. I hadn't thought about the reserve fund issue, so have added to my list of questions to ask before viewing. Checking communal areas, also very useful thank you.

I hadn't realised a flat owner could be part of the freehold, very interesting.

You've given me a lot more insight than any estate agent has, thank you.

That was for @Karmatime

@Octavia64 i knew a bit about cladding issues from the news, but didn't realise about height implications.

I'll find out how to see if a building has the correct fire safety certificates. Do you know if that has to be made publicly accessible information?

There is so much to learn isn't there? It's quite scary!

Thank you so much for helping

Find out who the management company is and google reviews: are they responsive to complaints, proactive in fixing stuff that is the responsibility of the freeholder?

You don’t get sight of the management pack which will give you financial information until after you get an accepted offer. One thing to look at is the buildings cover premium- these have all gone up massively this year like other kinds of insurance. Ask questions about how they go about finding the best price.

If you are going to get a share of the freehold you need to find out how this is managed between the leaseholders: do they use a third party management company or is it self managed? If the latter how do they come to decisions about spending money on fixing things? Does the ground floor flat have to contribute to costs of fixing the roof for example. If you are the top flat can you rely on your downstairs neighbours to contribute to the costs of fixing the roof?

Hi,
I live in an owned apartment. As others have said, check if there is a lease and if so, how long it is for and how much thr ground rent is. If freehold, find out who owns the freehold. Sometimes it will be held by a management company which is usually adminstered by an organisation on the behalf of the block, with each owner having an equal share. Check reserve, and the management co. will have records of fire safety, general health and safety and any lift/communcal area safety checks as applicable. They should fairly easily be able to send you comfirmation that these have taken place. If you can, contact the management co. (or look online at complanies house) to see if they have directors who are owners within the block - always a good sign. if you have chance to speak to neighbours ask about speediness of repairs etc. I enjoy being in an apartment, we do hav the usual expenses ie fixing central heating and so on - but any roof leaks or issues with the communal sky tv is someone else's problem!

we do hav the usual expenses ie fixing central heating and so on - but any roof leaks or issues with the communal sky tv is someone else's problem!

This only works if the management company is actually on the ball and responsive. I own 6 leasehold properties and have had to go as far as issuing solicitors letters and threatening to sue to get one management company to fix a leaky roof that was causing damage internally after many months of trying to get them to do something. Very frustrating for me and my tenants.

@VanCleefArpels

Youve raised some interesting and important issues here, thank you.

I had wondered before about roof repairs for example, but hadn't ever asked, so that's another definite on my list. As is the reviewing of the management company etc.

Thank you, I appreciate the time and thought you've given my queries (as I do with all other people who have commented)

There is certainly a lot to think about.

Try to buy a residents' managed flat or share of freehold. Easy to find out without buying the lease (estate agents often don't have a clue) by searching the development name on companies house.

Try to suss out the managing agent (if there is one)- are they responsive. If they are appointed by the residents, chances are they aren't too bad but you never know.

Go for period flats if you can (which would tend to be low rise anyway)

Make sure there is a sink fund, look into any future repairs.

At least 120 years on the lease (share of freehold would usually be 990 years anyway) and no ground rent.

READ the lease and make sure you get a good lawyer who can answer all your questions about the lease.

I bought a 1930s period 2 bedroom flat with 120 years left on the lease and no ground rent. Residents had bought the freeholder but the owner of mine at that time was an old lady who didn't participate but the good thing is that we are still allowed to be involved in the running of the development through the residents management company (which preceded the collective enfranchisment).

The horror stories are generally because flats like mine (residents managed) aren't super common in the UK as a whole. They appear to be more common in London suburbs (I found this out when helping my non London friends search for flats), including in purpose built flats. Perhaps its because flat living is more common here (and property is expensive) so there are more people with a fair bit of disposable income who would live in the flat for years and years and be interested to invest money into it by buying the freehold. I imagine in cheaper places, people may move on from the flat after a few years.

@Drcrafty

Good advice re looking at companies house and directors, thank you.

It seems to get complicated that another company appears to be able to manage the management company.

I have written a long list of questions which has given me a lot to think about. Thank you.

I'm off to work soon so won't be able to respond until much later; please don't think I'm ignoring you, we can't use phone at work.

I'll catch up in my lunch break. Thank you everyone, you've been fantastic.

https://www.starckuberoi.co.uk/share-of-freehold-meaning/#:~:text=In%20contrast%2C%20share%20of%20freehold,to%20extend%20or%20alter%20it.

Also as an example, this flat is listed as share of freehold https://www.rightmove.co.uk/properties/140577305#/?channel=RESBUY

and you can find the residents association on companies house and the address matches- https://find-and-update.company-information.service.gov.uk/company/01360610/officers

There are flats which may belong to such a development but as you only need to get the agreement of 50% of the flats in order to buy up the freehold, there may be flats listed as leasehold but where the residents own and manage the freehold. So while you might not get the benefit of the 999 year lease, at least you know that the freehold is not owned by some anonymous company in Jersey but by your neighbours. But the only way to tell is if the residents management company turns up on companie souse.

I live in a flat and am a director of the management company. It actually all works well. We have 12 flats in the block and a regular cleaner for communal areas, gardener, and window cleaner. I would add that if it's possible to find out what the situation was at the last committee meeting re upcoming maintenance/repairs/problems, that would also be useful OP.

I don't think the fire safety certificates have to be publicly accessible but I could be wrong.

Adding to the list to check.

1. Does block have communal heating or hot water systems into each flat (this will be paid out of service charge). If so you will have less control on when to goes on and off each year. Whilst you can choose when your radiators are on or off, you don't have the option to save money by choosing when to turn heating off altogether or stop having baths etc. Also at present communal heating is not covered by the domestic Energy price cap so energy has to bought on the wholesale market so it's actually more expensive than a flat with own combi boiler.

2. check the current floorplan against original lease . Ensure any changes made since then (e.g. walls moved, an ensuite or second toilet installed) have 'consent to alter' from the landlord/freeholder (which is required in most leases).

3. are any planned major works planned to communal areas (e.g. repairs replacements or maintenance to a roof, the windows, lift or communal boilers. Has a Section 20 notice of works been issued for anything? What are potential costs per flat?

Good luck. Wish I'd had this site available when I bought my place years ago!

@ElizabethBlackwell

You have raised very important points there, thank you. Much more added to my reading list and my list of questions for estate agents.

Thank you, genuinely appreciate your insight, time and help.

@lavender2023

Your links are so useful, thank you for finding them. I wouldn't have kniwn what To search for, despite being a nerd.

@marshmallowfinder

I will definitely enquire about the last management meeting a d previous./upcoming to repairs etc, thank you.

Thank you everyone so much, you have been truly brilliant and hopefully this will help others in the near future too. To think I nearly didn't post as I felt daft. Thanks again.

Dont feel that. It's a steep learning curve for all. Leasehold (and property) in general is badly regulated in the UK. I think that's why people here prefer freehold properties because there is less to look out for! Of course that comes with a higher price tag (for something in the same area) or commute costs which can pose different issues.

Also outside of London, I don't find there is a huge price difference between the unproblematic flats and terraced houses though of course I am not familiar with the areas and could be wrong about this. That is another thing to watch out for.

I wouldn't buy in a block if you can avoid it our service charge has more than doubled this year and nothing we can do

I was just about to say that
Mine is £180 per month and I'm in a not expensive part of the NW
That's for fuck all basically - they clean the windows, insure the building and hack back the grass so badly it's all destroyed

@Shadyboots23 our charges us for window cleaning but don't actually do it

thats why i say flats only make sense in expensive parts of the country in relatively central areas. If you buy a flat for £400k in zone 3 north london and pay £150 service charge as well as the tube fares for one person (DH cycles so doesn't cost anything) as opposed to buying a 2 bed terraced house in the Home Counties (which could cost around the same as the flat) and spending £400 per person on commuting from somewhere like Hitchin to Central London, you would spend less in London even after the service charge. Even if the service charge doubled (and mine has stayed the same because its residents managed and the residents want it to be low, DH actually wants it to be higher but was outvoted by the other people on the board), it would still be cheaper.

Furthermore, its not like you don't need to do maintenace on the house and council tax tends to be higher outside London.