Purchasing a GF flat but upstairs has planning permission.

psbrett

We are currently looking to buy a 3 bed ground floor flat but we notice there is planning permission for the freeholder to convert the upstairs into two 2 bedroom flats, how much could this potentially devalue the property. They are also knocking down the front wall to make a driveway for their cars whilst we keep the rear garden.
What potential problems could we face other than the inconvenience of work carried out whilst we move in and more visitors.
The flat we are buying is in of need of total work, new kitchen, bathroom etc and they are selling it to auction. Why would they not convert the ground floor flat as well as upstairs I'm a bit dubious about the purchase now but we are set for another viewing tomorrow as the auction takes place in a month.

BitterAndTwisted

I doubt that converting the upstairs into two flats would affect the value of the ground-floor one.

Perhaps the freeholder doesn't have the resources to fund the conversion upstairs without the sale?

Jowo_2

They may need the income from the first flat sale to fund their proposed development.

It is fairly normal for properties in need of significant work to sell at auction as that's where professional developers in the property business seek their properties because they sell for less than properties on the residential market and they've got the skills and means to do them up. Quite often they are cash buyers as all funds have to be with the auction company within 28 days whereas a conventional mortgage company may resist granting a mortgage to conventional buyers if the property requires significant work.

It's swifter, too, and less risk, too. It's all wrapped up within a month whereas if the freeholder tried to sell the property on the open market, conveyancing can drag on for months and the buyers can pull out right up to exchange of contracts.

I don't see anything sinister in what's happening but are you buying this flat for business reasons or personal? If its a personal buy do you have the appetite for the potential returns but not for the risks?

psbrett

We are FTB and hence a bit short on cash so we see this as an ideal opportunity. We have a mortgage in principle with HSBC 80 % LTV, which has a homebuyers report attached and we have local solicitors dealing with the legals.
It's just a bit of a daunting process and so we don't want anything to go wrong as we intend to make an offer pre auction to see if that gets accepted. If it does it will leave us poor but with just about sufficient funds to get the kitchen,bathroom, a lick of paint and a lot on interest free credit.

Richard_Webster

If you need a mortgage to buy this flat you will need to have a formal offer in place before the auction and a solicitor will need to check the auction legal pack.

The very fact that it is being auctioned would sound warning bells with me that there might be something funny with the lease or other documentation that the seller is hoping you won't notice.

psbrett

Richard_Webster wrote: »

If you need a mortgage to buy this flat you will need to have a formal offer in place before the auction and a solicitor will need to check the auction legal pack.

The very fact that it is being auctioned would sound warning bells with me that there might be something funny with the lease or other documentation that the seller is hoping you won't notice.

We are picking up the auction legal pack when we go for the viewing and we will hand that over to our solicitors immediately. It was up for sale 6 months ago for 15% higher than the auction price and we were going to make an offer then but another offer had been accepted.
The only reason I can think of the sale falling through is the proposed work on the land in front of the lounge & bedroom windows making that a driveway and the work upstairs.
It has a 999 year lease which was signed up a couple of years a go and the planning application was accepted in 2005 so I suppose they are doing the work now before the 5 year deadline.

Yorkie1

Just some random thoughts. I'm sure you've already thought of this, but it sounds as though you'll have cars coming and going from the parking spaces outside your windows - noise, headlights, doors slamming.

Will there be increased competition for parking around the building generally? If there are two 2 bedroom flats going in, that's potentially 4 extra cars (one each for two couples) on top of any you may have.

There are quite a lot of posts on MSE at the moment about sound noise between flats. Will those flats above you have conditions in the lease regarding insulation levels / flooring (i.e. carpet rather than floorboards or laminate)?

London_Town

Just to develop Yorkie1's point a little further, you could have the potential for serious noise issues if there are going to be two properties directly above your living space. Where will the two kitchens, living rooms and bedrooms be in relation to your layout? You could have two washing machines whirring away above your bedroom if that's where the kitchens were placed. You simply double the chance of having noise issues from above in this sort of set up. While this issue may not affect the value, I think it would certainly put off some future buyers. This forum has had many threads about conversions being badly soundproofed.

Also, I completely agree with Yorkie1 about parking. Your new neighbours could have up to 4 cars before they even think about visitors. If you can afford it, I'd look for a smaller freehold house. If your area and budget limits you to a flat, I would avoid any groundfloor one for all the potential problems. This one sounds like a nightmare waiting to happen.

poppysarah

Twice as many neighbours as you have now, twice as much disturbance, twice as much parking...