Buying leasehold local authority flat

carefullycautious

Just a few questions

Are local authorities better at managing the leaseholds than say Private companies

Has anyone brought a LA flat and what is your experience of the LA.

Can you extend your lease or have you been refused.

I am thinking more of low rise flats as opposed to towerblocks

silvercar

The downside is that the council can decide to spend a fortune improving the block and you have no option but to pay your proportion of the costs.

carefullycautious

Thanks Silvercar, keep them coming

Poppy9

The LA might decided to offload it's housing stock to a Housing assoc. or even set up their own Housing Assoc. They usually do this as it's the only way they can secure funding for repairs & upgrades.

carefullycautious

So if you were in a block that also had tenents this could happen. If the whole block were private then they could apply for the freehold or stay leasehold with the LA. So does this mean the housing association could take over the leasehold of an all privately owned block?

Poppy9

You need to do some research on "stock transfer" and ex -tenants.

clueless1

Be very careful when buying council leasehold. Please take the following into consideration.
service charge on a flat within an estate cost alot more to run than a ex council property outside a estate. You have to pay for estate lighting, estate grounds mantenience, lifts etc and the cost just keeps on rising.
As mentioned, you have no choice when majors works are done. I had to fork out the best part of £20k to have work done on my building including roof work and new lifts even though I live on the ground floor of flat.
My experience is that every time you tell the council that you are a lease holder, they dont want to know. you own the property so what ever problems you have, you need to deal with it yourself.
at a later date, selling a ex council house is gonna be alot easier than trying to sell a ex council flat. not all mortgage companies will except ex council flats. Only a very minority will take this on and even when they do, they would require a big deposit so this means when selling, you have a very small market to put your property on. I've had my property on the market on and off for years and have had countless numbers of serious offers (over 10) but each time offers were dropped when buyers couldnt get mortgage for property. I did manage to sell my flat just last month but it had been a very stressful 5 years and I had to sell at a very very low price even when you take the reccession into account plus with the major works costs, it wasnt worth it.
Management companies, private versus LA. You get good and bad management companies so do your homework. The LA has a obligation to their tennants so any problems with building, they will fix and add to your service charge if nessary. With private companies, it depends on their management of the building. If not enough leaseholder pay the service charge, especially in this reccession, they may not be able to deal with any problems until they do have the funds to.
Do I need to add any more? lol

BitterAndTwisted

It's my understanding that when you apply to buy the LA or ALMO are compelled to tell you what major works are planned for the next five years, after that you have to cough up whatever it is that they ask you for. My downstairs neighbour is an owner (I am not) and she thinks they make the service charge figures up on the back of fag packet

clutton_2

i have had an ex-LA flat in a block of 6 for several years. Maintainance charges are £17 pcm and i bought it just after major works had been done. i am pleased with their management and they have committee leasehold meetings regularly. it is also my highest yielding BTL property as it was so cheap to buy.

clueless1

Maintainance charges are £17 pcm

Wow, that is extremely cheap but I'm sure that you must be in the lucky minority. Most LA service charges are around the £1k - £2k PA mark, depends on what borough you're in I suppose.
My service charge was close to £2k PA and I was in Southwark, London.

GDB2222

The LAs tend to gold-plate the maintenance contracts, with layers of management costs. My LA charges roughly £600 pa for the standard service charge, including insurance. That's not too bad, but every four to five years they decide to paint the block and do some maintenance work, which seems to come out at £5-10k every time. The most recent time, they decided to double-glaze the blocks, to comply with a Govt Decent Homes initiative, so the major works cost this time came to £14k.

For a BTL, that may not matter too much. For a London flat, the service charges may average out at around 20%-25% of the rent over a typical 5 years maintenance cycle. You just need to factor it in.