Right to Buy valuation too high

Mokka

sandsni wrote: »

I would have thought major works would increase the value of the property rather than decrease, so maybe the LL has taken that into consideration with the valuation. Or is it that if you buy before they're done next year you'd have to pay for the work yourself?

Leaseholders always have to pay for repairs etc, even in non-council properties, so yes we would have to pay for it and we would not be able to get a mortgage for this extra expense.

So it is not unreasonable to expect that the bad condition of the property and the need to pay for expensive works should lower the price of the property?

Another question is:
Would spending £27k on major works increase the value of the property by £27K?

kingstreet

Mokka wrote: »

It was my understanding that the discount on RTB counts as a deposit and with almost 50% equity in the property it becomes much lower risk to the lender.

The proposition is lower risk, yes, but if the property is unmortgageable, it's unmortgageable and that supercedes any reduced risk from a lower LTV.

I'd see if a local broker can get someone to lend on it before you flog the valuation horse to death trying to get it cheaper.

kingstreet

FWIW six lenders come up on a Mortgage Brain search, but that is not always reliable and I'd be ringing round checking the property's mortgageability before I went back to my client with possible lender options.

One of them makes the following comment;-

Flats (on any level) in multi-storey type properties are usually acceptable, subject to exceptions (e.g. where the valuer identifies issues with the building and/or locality which are likely to adversely affect resale).

So, that's surveyor's opinion and that means spending money on fees to find out if they fancy it or not.

kingstreet

... and here's one of the six gone;-

Flats over Five Storeys

We will not accept former local authority flats in blocks of more than five storeys. This also applies to maisonettes and Scottish tenements in blocks of more than five storeys that were, or still are, in local authority ownership.

kingstreet

... and another!

Flats in a block of more than ten storeys will not be considered.

DieselASFC

This estimated cost works of 27k, is that just your share? Is that just for one piece of work, or is that the maximum service charge over the 5 years? If not, what is the total service charge over 5 years? You might be better waiting until after the works been started, then restart the RTB process.

Mokka

We are considering waiting till the works are completed, as the 27k is just our share (estimated- it will probably be a bit lower) and it is on top of service charges, which are reasonable.

I have contacted a broker who seemed positive (subject to credit check)

But if there is so little choice (possibly only 2 lenders) does this mean we will get a really bad deal?

If I understand correctly even if we have money for deposit so the LTV will be below 50% or maybe a potential guarantor this does not make the slightest bit of difference to lenders?

Maybe I should look into an informal lender online:)?

sandsni

DieselASFC wrote: »

You might be better waiting until after the works been started, then restart the RTB process.

That's exactly what I was thinking. Why not wait until the works are done and THEN look at RTB? A valuation at that point would take account of the work and whether or not it added value to the property rather than the OP trying to work it out.

moremore

sandsni wrote: »

That's exactly what I was thinking. Why not wait until the works are done and THEN look at RTB? A valuation at that point would take account of the work and whether or not it added value to the property rather than the OP trying to work it out.

No do not wait until the work is done as the work will be taken into account with your RTB and will be added to the valuation as well as any work over done on your block of flats for the last 12 years.
You should also look at how large your estate is, as that will also be charge for the maintenance for it as well that is if one can call what the council does is looking after property as they have not got clue and will give all of it to their contractors. The council does not know or care how these people will do to tenants or their home or on the block of flats as all they are interested in is making money and doing as little as possible for it. You will not have much of come back if they make a big mess of your home and the common areas as the council never check any work their contractors work. Also, council will always take their contractors side and they will blame the tenants for everything that has always been their culture and is still is. You see, council staff gets bored sitting at their desk waiting for payday and they got to amuse themselves somehow and making fun of tenants has always good fun for them.

Council charge tenants also for digital service this is money for their contractors this will have to be paid regardless whether tenants got a TV or not. I know of a block of flat that they have been charging £4 a month from each tenant for the last 3 years even before the digital change over. This is on going and will not end for the tenants. Also tenants were getting digital service before the change over took place.

Some council will have the option of buying back their property if you sell it within 10 years.

The RTB is not great deal as you think. It was a much better deal when maggie first introduced it in the 80's bearing in mind that property has gone up 300% since them. Also these council has more than made their money in some old block of flats since they were built in the 60’s and 70’s think of all the rent that they have got for the past 50 years from tenants.

If most of the flats in your block are on long leasehold than it may not be so bad but if the property is mostly tenants then you will have problems, not that they will be bad tenants, but they usually do complain to the council and will put up with bad caretaking, What I have seen there is not much caretaking in these block of flats, most tenants will put up with or maybe afraid to complain or maybe too old or possible do not know how to complain as they English is not their first language.

I know of a block of 64 flats and the council gets 28K a year for caretaking, the council uses a guy that does not speak much english and does not know anything about H&S issues. He ignores everything and does not go above the ground floor he leave the floor in a dreadful state he is very lazy just like the rest of his colleagues. This man only spends an hour a day at that particular block and they reason he gets away with it is because not enough tenants complains to the council.
Be very careful with RTB as it can be a disaster for some people

DieselASFC

I think only improvements are taken into consideration when coming up with a valuation, not maintenance. Also, they don't add it to the valuation, but rather deduct it from your discount.