buying council flat advice please

ozbod1

hi guys, i have just recieved a price to buy or should i say become the leaseholder of my council flat, i have lived here for 14 years the flat is 1 of 2 its had a new roof and central heating so we decided to buy instead of paying the council rent, i know there there is a difference between buying a house and a flat but its just being valued at 39,000 and with my discount i only have to pay 11,800 plus a £10 a year ground rent and a £575 a year service charge, at the price im quite happy to buy we have £2000 saved towards it and i am going to see a solicitor and ask our bank for a loan of £10,000 over 5 years, i dont really trust the council and i am wondering is there any other things we need to consider? all in all the monthy payments will be exactly what we are paying now in rent etc so it seems common sense to buy? like i say im going to see a solicitior but i dont ant to pay loads of fees for surveys etc i cant see the point on the price we are paying and we dont plan to sell/move so can anyone give me some advice or point out anything im missing? thanks very much in advance...

Hammyman

Buying council houses is one of the safest bets you can take. Your choice if you don't have the survey and as you'll be doing it by bank loan, there's no need. Should cost you around £400 or so in solicitors fees.

calleyw

you might want to read this

yours

Calley

G_M

If it's really (an unsecured) bank loan, then survey decision is up to you. If it's a secured loan (mortgage) the bank will insist on a survey.

There's always a risk regarding service charges as councils often hike them up (especially when their money is tight!), or make one-off charges for big repair jobs that can be overly expensive. If you've just had a new roof, that's one ticked off the list.

Overall, sounds good though.

ozbod1

thanks guys you have hit the nail on the head the price is obviously good but in the 14 years or so i have lived here the council have done zero inside i have done it all myself, we had a new roof and the put tarmac on the driveway{only because our neighbour is disabled} but i have visions of them wanting to do a load of work and hitting me for the repairs, that said everything is in good condition or stuff i can fix myself, we both dont earn a lot but we are both self-employed which may be a problem? but our bank can see what we earn as we both have current and business accounts with natwest. another thing that has been playing on my mind is i have several credit cards that i use and have always paid back on time, if we fail a loan would i be stupid to pay £10,000 on a credit card? reason ask is sometimes i have spare money sometimes not but i could pay more when i have it and less when not? tbh now isnt a good time but by march things should get better?...thanks for the help

clutton_2

Councils occasionally undertake "major works" - you need to find out if they have any in the pipeline.. as you will be reponsible for 50% of the cost if there are only 2 flats in the block

brightonman123

service charge sounds dear- check what's included / not.. and what liability is there for any major repairs, in future..?

ozbod1

sorry i forgot to mention there is no major works planned for the next 5 years, as far as i can gather the service charge is £500 per year plus 75 admin which im not sure what i get for that but will ask solicitor but it sais its basic insurance for the building but i will be getting my own contents insurance, seems to be lots of mumbo jumbo from the council even a covenant that i dont keep a cat or dog? which will be a bit awkward as we own a dog and have done since i moved in 14 years ago, i checked at the time and im allowed to own a dog so whats all that about? a solicitor is a must im thinking...

olly300

ozbod1 wrote: »

sorry i forgot to mention there is no major works planned for the next 5 years, as far as i can gather the service charge is £500 per year plus 75 admin which im not sure what i get for that but will ask solicitor but it sais its basic insurance for the building but i will be getting my own contents insurance,

Buildings insurance is for the structure of the building i.e. external walls, windows, roof and shared communal parts i.e. drive

It seems a lot but you need to confirm whether the council self insure (which according to one of my solicitor friends' they tend to do) rather than taking out an insurance policy- you may be able to do this by just looking on the council website.

All freeholders are allowed to apply an admin charge for sorting things out. If you look on the LEASE website they have a leaflets on leasehold.

ozbod1 wrote: »

seems to be lots of mumbo jumbo from the council even a covenant that i dont keep a cat or dog? which will be a bit awkward as we own a dog and have done since i moved in 14 years ago, i checked at the time and im allowed to own a dog so whats all that about? a solicitor is a must im thinking...

If you had asked the council permission to own the dog when you were a tenant and have some form of proof, you should ask them to remove that covenant from the lease.

If you are self-employed and there are things about running businesses from home that are contrary to what you do then get them removed and altered as well. There is a difference between disturbing your neighbours and running a clerical business with no business visitors from home.

In regards to repairs you need to find out whether your property is counted separately for repairs or grouped with others nearby.

If it's counted as being separate then you can fight more easily to prove what repairs the council want to impose are not necessary.

BTW before you did the drive I hope you "asked" permission from the council in writing.

ozbod1

i dont have proof of asking the council if i can have a dog it was 14 years ago i think i will be the same as everyone else and keep stum about that, everyone has a dog and the council inspector has visited me yearly to check on the upkeep etc and always sees i take care of things and never mentioned my dog...the council re-surfaced the drive a few years ago-not me ....many thanks

dopester

If you're happy and settled in the area, with no prospect of needing to move for job relocation or other, then how you've described things, it might make a lot of sense to buy.

all in all the monthy payments will be exactly what we are paying now in rent etc so it seems common sense to buy?

So when you clear the mortgage/loan over 5 years... you'll have a lot more diposable income, for you won't be paying any more rent to the council, or mortgage into the future. You'd also have security into older age... not having to make rent payments + put some of that saved money towards future repair costs.

However, I wouldn't rule out a survey. A survey might tell you other important things, including whether it is of a non-standard construction, 'designated defective' ect. That any potential buyer you might want to sell it onto in the future, might not get a mortgage due to lenders refusing to lend on non-standard.. and also throw into question the concept of value + possible expensive repairs in the future? If the property is in a block, not a detacted home, could there be a risk of having to contribute full market repair costs where surrounding council tenants who are renting are not?

Purchase of defective dwellings

You are entitled to buy your home even though it is a defective dwelling provided, as with any other tenant, you meet the eligibility requirement set out in Section 2. However, you should appreciate that the purchase of a designated defective dwelling has a number of implications, some of which are set out below:

* There are likely to be problems obtaining a mortgage on the property from traditional sources and it is likely that a mortgage will only be available from a specialist lender;
* On purchasing the property you would be responsible for any repairs necessary to the property, including any repairs arising from any defects;
* No grant assistance would be available to the purchaser to carry out works to the property under the provisions of Part XVI of the Housing Act 1985;
* The fact that the property is deemed to be defective may have an impact on any future sale of the property as there is likely to be a more limited market for properties of this nature.

http://www.ashfield-dc.gov.uk/ccm/navigation/business/estates-management/right-to-buy-council-house-/defective-dwellings/;jsessionid=7E7E17CCAD6F985A4D7E1409838C4A19