Buying an ex Council flat for investment in Wood Green

Dave_Ham

You will definitely rent it out in Wood Green, although not sure to what sort of tenants.

If you are using a mortgage to finance, as initially said you need to absolutely check which lenders will lend or you could just be throwing money away for a lenders surveyor to say not suitable security.

When I worked at the bank (to be fair about 10 years ago) there was always a lot of trouble at the Wood Green branch, but I do concur that parts of East/North London are being outpriced so it is turning...

Good luck

Lilly_L

Thanks Dave I will keep an eye on the surverys.

Yes I heard from the locals I met at the bus stop that it used to be seriously rough but now it's got a lot better and read on the net that people start buying in wood green coz they can no longer afford the surrounding posh areas. so I was hoping maybe it could be a good investment choice and plus it should be easy to rent (type of tenants probs out of my hand).

silvercar

Lilly_L wrote: »

This flat is to let out completely after 6 months per se, never claimed a single penny benefit so I don't really know how HB works does that mean if its higher I can rent it for better money?

I think £205k for an ex council is not excatly cheap its in fact more expensive than privately built properties with good decorations in South London(Croydon/Sutton etc) and certainly a lot dearer than most parts in East London. thats why Im worried that it might be a bit overpriced but then all the other council flats on Lordship Lane is £10k dearer!

If you are intending to let the property, you need a mortgage that will allow you to do so. Either a buy-to-let mortgage or consent to let on a residential mortgage. CTL applied for soon after buying creates the suspician that you intended to let all along and is often refused. If you want a BTL mortgage you need a big deposit.

silvercar

This flat is to let out completely after 6 months per se, never claimed a single penny benefit so I don't really know how HB works does that mean if its higher I can rent it for better money?

Google LHA for your area. Is it Haringey? If so, there are 2 rates depending whether it is inner London or outer. Here is a link:

http://www.haringey.gov.uk/index/advice_tax_and_benefits/benefits/lha/lharates.htm

Look at the 2 bed rate and you will see the maximum benefit that can be paid for someone eligible to full LHA at the 2 bed rate. That gives you a guide to the maximum payable by anyone on a full claim. Not saying you can't get more, but an ex council property may attract hat sort of tenant and that sort of rent level.

That link also has a link to a map, so you can see how crossing a road can influence the levels.

Bear in mind that the government plans to cut back benefit levels. So 2 young sharers would now only get the shared home rate etc.

discplayer

Lilly_L wrote: »

I think £205k for an ex council is not excatly cheap its in fact more expensive than privately built properties with good decorations in South London(Croydon/Sutton etc) and certainly a lot dearer than most parts in East London. thats why Im worried that it might be a bit overpriced but then all the other council flats on Lordship Lane is £10k dearer!

You're right to look at other places for sale to help you deicide whether it's a reasonable price or not. However, your comparison with Croydon and Sutton's not really a fair comparison, for a start they're further out and not on the tube. This will usually effect the price even if the flat and street/estate have exactly the same character.

secreticicle

I live in Hornsey and am probably exactly the kind of person you're trying to attract to rent. Can't quite afford Crouch End.

From looking at a map, I don't think that's neccesarily one of the better areas. I hear that Noel Park is very up and coming and properties go very quickly there - might be worth looking.

I think if you're buying in Wood Green might be worth considering a flat in a terraced house rather than an ex-council and then you'd be more likely to attract the people that are being priced out of Crouch End.

Drop me a PM if you want to chat xxx

Lilly_L

hey thanks for your reply I PMed you, not sure it was sent successfully tho as Im still new to the site. if you havent got any msg just let me know I ll try again!

Lilly_L

Thank you I had a look its just above £1000 lower than I expected (purple region more than £1200 though once again areas are posh) but I assume private tenants will need to rent as well right, the 3/4 ex councils I viewed all seemed to have private tenants in them. some looked a bit messy some very nice and neat but overall all seemed to be fairly decent people.

now that the more I look the more confused I get.... do ex council flats not attract private tenants?

Lilly_L

Yes you are completely right. if I compare North Zone 3, obviously Golders Green/Finchley/Muswell Hill/Crouch End all a lot more expensive moving further East prices drop fairly dramatically. adding the complication that when a property is priced the lease, location, decoration, ownership, transport link etc etc all count towards the final asking price. so its hard to compare sometimes unless its an obvious one like Brixton and Kensington or Muswell Hill and Seven Sisters...

GDB2222

Lilly_L wrote: »

Thanks it is indeed Sandra Close, I did quite a bit of digging on Rightmove the average rent around there ranges from £1100 to £1300.

and I am still a bit gobsmacked with London prices that was actually the cheapest ex council I saw other ex council flats were all above £210k.

I know many people would suggest going to Crouch End or Muswell Hill side coz it's nice and trendy but I don't have £300k budget....

This one is round the corner at £195k. http://www.rightmove.co.uk/property-for-sale/property-21591009.html?premiumA=true

Bear in mind that the only tenants you will get will be those on housing benefit. The local reference rent is £1000 per month or £231 per week. (https://lha-direct.voa.gov.uk/SearchResults.aspx?Postcode=N22%2b5HB&LHACategory=999&Month=7&Year=2012&SearchPageParameters=true)

Probably:
You will not get more than the local reference rent of £1000/mth.
The tenants you will get may well be iffy.
The council will sting you for truly ridiculous service charges, eg £15k+ to replace the windows.

Personally, I would not take that on for a rental yield of only 6%.

I had a perfectly nice modern flat up the road from there in Tottenham, privately owned block, not council. I simply could not get decent tenants and sold up eventually.