Buying in an Ex-Council block, Central London

[erQQ]

I'm a big fan of post-war architecture that most people seem to hate. Have seen a nice project flat for a very very good price in a great location. It's a mixed building of private and council tenants.

Would I be mad to consider it? It has a long lease and low service charge. Understand that I may be on the hook for big projects like windows et cetera though.

Check the cladding situation..

As you seem to be aware, an issue with council blocks can be very high costs for building works, due to they way they run tenders etc.

I have nothing against council blocks in principle (spent my early childhood in one) but, particularly in inner London, they can have some 'other issues'.

Also, generally, they are harder to sell on in the future. And if its a 'project' flat it is often harder with a council block to add as much value as the works cost the same but the 'ceiling price' of the block will be lower.

There are plenty of private post-war gems in London. The Barbican would be my ideal but we could not quite stretch to that!!!

Ex Council flats can be good value - they are often a better size, more solidly built and have more storage than private ones. They can be a good way for people on more modest incomes to buy in central London.

HOWEVER The service charges will be low because generally councils, unlike a lot of private freeholders, do not keep a sinking fund. So anything more than the bare minimum maintenance (eg cleaning, small running repairs) will be billed separately. You are at the mercy of the councils' long term plans - they will do it when they want to not when it is best for owners.

We owned a 70s council flat, and the service charges were low. As PP said, council don't have sinking funds so you could get a higher bill if major work is needed. Any planned major work that the seller is aware of should be declared. We did a renovation but were very mindful that those sort of flats will only ever be worth so much, so spent the least we could. I don't want to sound snobby in anyway, but do consider that you'll be in a block/on an estate with council tenants who may not be as respectful of their property and surroundings as you may be. We had an awful problem with fly tipping (think piles of fridges in the car park), and there was a lot of antisocial behaviour and noise.

As someone mentioned above these can be quite hard to sell on so bear this in mind.

Agree with others re the potential for high maintenance costs. This put me off a flat that had the council as a leaseholder many years ago (it wasn't on an estate).
Make sure you know about the estate, any potential issues with anti-social behaviour etc. I'm not a snob, I grew up on an estate that got worse over the years, sadly.
On the plus side it can be a great way of getting a spacious property in a central location.

They yield really well if you rent them out, but don't really appreciate in value much.

My first flat was a gorgeous 1950s ex-council in London. Very small estate, beautiful position, huge rooms, excellent traditional brick construction. It was a lovely place to live and I sold it for 5x what I paid. It's not true to say they don't appreciate in value, they just will always be cheap for what you get, so they'll never be worth what a private flat of same size in same location is worth- but then you won't have paid those prices in the first place.

Benefits for me of council estate was that it was well looked-after - we had a live-in caretaker in my block, communal areas were maintained and done to a schedule rather than tenants having to fight to come to an agreement. Dealing with the council for repairs was actually brilliant - for instance, once the tenant above had a leak that came in my flat, and the council sorted out repairs instantly and without quibbling, rather than if you are dealing with an individual who may not have the money to sort something quickly. Purpose built flat rather than a conversion was so nice, sensible layout, proper bathroom with window, nice big balcony for outdoor space.

Cons - As others have said Major Works are separate to the low annual service charge, and you don't really get any say about anything - timing, cost, contractors etc. But the process is very formalised and you get a lot of warning. That said, I lived in mine for 12 years without getting any bills larger than for a repaint, but I think double glazing happened shortly after I left. Other people will doubtless be a bit snobby about you living in a council flat.

The biggest problem with mine was the lease was a bit over-dramatic. I think the Labour council were a bit snippy about right-to-buy and also very keen to wash themselves of any responsibility for any structural defects, so the lease had quite a lot of stuff in it about random bits of the building that might fall apart and if it did, the council had no liability. The building was actually very solid and had no problems, but when I was selling the lease did spook some buyers, even though survey said there was nothing wrong with the building. It's sold several times since then so, possibly I just got unlucky with buyers.

Watch out for blocks with lifts - lift maintenance charges can be hugely expensive.

If it's a high rise over 5 storeys then hard to get a mortgage, lenders often don't like them.

London is different. There are lots of things lenders don't like - flats above shops, deck access etc.. that they are prepared to wear in London.