Am I crazy to do this?

catgirl2

Hi

I'm in the final stages of buying a 2 bedroom flat in East London (zone 3), coming up to exchange.

As time has passed I've found out more, and the maintenance work needed in particular has got more worrying. The information I have is from a survey, getting electrical / gas / damp people in to quote, talking to other residents, and maintenance records.

The price is 199, lease is 97 years. A very similar flat sold in the same block for 20k less about 6 months ago. Prices have been rising fast, but not that fast one would think. On the other hand, at present other 2 bed flats in the area are rarely advertised below 200, often more like 250. However, most 2 beds in the area are conversions, and this is a 1930s purpose built flat, and conversions seem to be more expensive.

The management company, from talking to residents and their accounts, seems to have been doing minimal maintenance interrupted by occasional expensive major work. They stayed mostly within the £700 total annual charges for many years, and then occasionally additional big bills for double glazing, exterior redecoration and repair, etc. Over the past 8 years the averaged out charges have been approaching double the 700 (including the major work). They say they have "no plans" for major work - which seems odd given what needs doing.

Note this list is despite having had repairs done 5 years ago as part of work on exterior redecoration, roof repair plus all kinds of miscellaneous other things, costing about £5000 in total. I don't know but it's possible they may have originally wanted to do more extensive work on the roof, and postponed in response to residents' protests at the cost - that's just based on the age of the roof and the fact I know the quote was much higher and then got reduced when residents got together and got another quote.

* The flat roof has not been replaced for probably more than 20 years and is in poor condition (water pooling etc.). They did minor repairs 5 years ago. Actual age is not known!

* The double glazing is a little over 20 years old so the management company may decide to replace it any time. Could be 4k I would think (remember I don't get to pick who does it, or when).

* Water tank and housing are in poor condition (despite the work just 5 years ago)

* Interior stairwell in poor condition. Again, despite the work 5 years ago.

* There is some damp damage. Not too bad, estimated £300 to replaster.

* Probably should get chemical damp proof course done. Not expensive but management company has to do it.

* Immediate gas and electrical work needed, £1500

* About £3000 for interior work, mostly not urgent and I'm not too fussed about

* Boiler is getting on. Probably £2000 within 5 or 10 years.

* More minor things also

* In 10 years the lease will need renewing, maybe 8k


Certainly at least the work done 5 years ago must have been minimal as far as the water tank goes.

In my current circumstances I can afford it, taking into account pessimistic assumptions about interest rates and that the roof will cost 5k within next 5 years, but it's tighter than I'd like, who knows what the future may bring. Plus I worry the roof could be hugely expensive if the structure underneath is rotting or something.

Oh yeah, then there's the iffy economy combined with crazy property price rises apparently based in part on volatile foreign investment. Not quite a recipe for a straightforward buying decision!

What do you think?

Conrad

None of us can confidently say what we would do as each of us has a cocktail of differing circumstances both now and in the future.

Only you can decide whether to see this through or buy another property.

One person would relish the opportunity to do the place up, another would walk away and pay more for a hassle free existence.
Another person might decide to go for a cheaper smaller place perhaps in another area.

I have been buying little flats in outer London and prices are rapidly rising month on month. Cant see this changing.

As to the iffy economy, I strongly disagree. Note I was very pessimistic in 2006 when everyone else was saying prices only go up.
I sold my buy to lets as a result.

Going forwards we are on a medium to long term prosperity cycle whereby property will something like double in value.

There's never a right time, so don't even think about trying to time the market as you would need to know the inner thoughts of some 40 million adults to know where we're going economically.
Remember almost no experts saw the credit crunch coming - so don't pay them much attention - and yes that includes the bloke you know of that works in the city.


Set yourself a time to make your mid up by, that's what I would do.
Write down the pros on the left and cons on the right.

Good luck.

catgirl2

Conrad wrote: »

Only you can decide whether to see this through or buy another property.

True of course but it's always good to hear what other people have to say.

One person would relish the opportunity to do the place up, another would walk away and pay more for a hassle free existence.

The interior is cheap in comparison to everything else. I can easily see myself spending 15 or even 20k over 10 years (or even worse? depending on that roof!). Plus the expensive parts are down to the management company - both timing and cost.

Another person might decide to go for a cheaper smaller place perhaps in another area.

Smaller places are not much cheaper, and I wouldn't have the security / income advantage of being able to get a lodger if I decide to.

Going forwards we are on a medium to long term prosperity cycle whereby property will something like double in value.

Not sure about this flat but I'll buy your crystal ball.

Just kidding, I see you take it all back in the rest of your post

Good luck.

Thanks

cattie

Is this an ex council flat? Only they usually end up being quite costly in terms of maintenance & major work requirements. I think I would think twice about buying one, although I know they are often much cheaper than private flats.

I've never heard of a flat in a block needing a chemical damp course, apart from a Victorian purpose built maisonette I once owned, just me downstairs & another flat upstairs.

What is the immediate gas & electrical work required?? A complete rewire of a house would cost in the region of £4k in London, so this figure seems way out for something that is probably minor. I have to say I've never heard of anybody needing urgent gas work & have owned quite a few properties over the years. Some of them old & in quite poor condition.

Worrying that a boiler might need replacing in 5 or 10 yrs time is just silly. Don't worry about what might happen, life is too short & full of enough worries to do that. The thing that should concern you is that it's working perfectly now.

Same with the lease, why are you worrying yourself about it now? It's not necessary right at this moment in time.

£3k for interior work? What does this consist of? Paint is cheap & if the flat is liveable for the time being, just take it one room at a time & buy stuff when it's on offer or in the sales.

I haven't a clue why a conversion should be more expensive than a purpose built flat. I know what I'd prefer. A purpose built flat has been constructed with neighbours in mind. Because they were built as single family houses, many conversions have poor sound insulation & you can hear your neighbours talking etc. through the floors. And what a nightmare when said neighbours have wooden floors, you need to have the earplugs & headache tablets nearby.

Don't take any notice at what prices other flats are listed at, it's what they are selling for. At the moment although the market in London has picked up, many ea's are setting unrealistically high asking prices on some properties.

I think you've got a touch of nerves & cold feet. You must have quite liked the flat when you offered on it. Look upon it as somewhere that could help pay for itself. Perhaps you could rent out the spare room or consider taking in a student from abroad attending an English Language college, this gives you more control over your home & the rates are quite good. This would help towards the mortgage & help you build up a little fund for when any maintenance work needs doing to the block.

The other residents sound like a decent bunch, banding together to protest if costs seem overly high & that's a good thing, better than living amongst people who have no interest whatsoever in trying to ensure they get a fair deal.

Come back here & let us know what you decide & perhaps invite us to a painting party.:rotfl:

catgirl2

cattie wrote: »

Is this an ex council flat? Only they usually end up being quite costly in terms of maintenance & major work requirements. I think I would think twice about buying one, although I know they are often much cheaper than private flats.

No, it's not an ex-council flat. To be honest I might prefer that: at least they are fairly predictable and diligent I suppose.

This one looks like (ignoring the lease renewal) it will cost me 15k over 10 years in maintenance. If that were a steady or predictable cost it wouldn't be half so bad, but it's under the control of the maintenance firm who say they have no plans... obviously I will need to save, but if they do something soon after I move, or I earn less, it would be painful at least.

What is the immediate gas & electrical work required?? A complete rewire of a house would cost in the region of £4k in London, so this figure seems way out for something that is probably minor. I have to say I've never heard of anybody needing urgent gas work & have owned quite a few properties over the years. Some of them old & in quite poor condition.

I'm satisfied it needs doing. Especially if there's a lodger. It may be a bit less than that, I only got one of the quotes today and it was lower.

Worrying that a boiler might need replacing in 5 or 10 yrs time is just silly. Don't worry about what might happen, life is too short & full of enough worries to do that. The thing that should concern you is that it's working perfectly now.

I think I'm just adding up everything that I'm not paying now, but will be paying if I own this flat. Doesn't seem silly? 10 years out of course things get less certain, but certainly I think 5 or 10 years is a sensible timescale to think about when it comes to buying a flat.

Same with the lease, why are you worrying yourself about it now? It's not necessary right at this moment in time.

Definitely that's further out so it's less a concern I agree.

£3k for interior work? What does this consist of? Paint is cheap & if the flat is liveable for the time being, just take it one room at a time & buy stuff when it's on offer or in the sales.

A long list, yes I definitely plan on doing that, though some things will take priority especially if I get a lodger (furniture and shower!).

I haven't a clue why a conversion should be more expensive than a purpose built flat. I know what I'd prefer. A purpose built flat has been constructed with neighbours in mind. Because they were built as single family houses, many conversions have poor sound insulation & you can hear your neighbours talking etc. through the floors. And what a nightmare when said neighbours have wooden floors, you need to have the earplugs & headache tablets nearby.

I have the impression the maintenance costs are lower. No scaffolding needed, no flat roofs, etc. Plus I think people just like tend to like the feel of conversions - I sympathize, they're often just cozier than blocks, and tend to be on quieter streets.

I think you've got a touch of nerves & cold feet. You must have quite liked the flat when you offered on it. Look upon it as somewhere that could help pay for itself. Perhaps you could rent out the spare room or consider taking in a student from abroad attending an English Language college, this gives you more control over your home & the rates are quite good. This would help towards the mortgage & help you build up a little fund for when any maintenance work needs doing to the block.

Definitely thinking about that sort of thing. Interesting idea about colleges, but why does that give you more control? More than whoever you might find on gumtree or something you mean?

The other residents sound like a decent bunch, banding together to protest if costs seem overly high & that's a good thing, better than living amongst people who have no interest whatsoever in trying to ensure they get a fair deal.

Come back here & let us know what you decide & perhaps invite us to a painting party.:rotfl:

cattie

catgirl2 wrote: »

Definitely thinking about that sort of thing. Interesting idea about colleges, but why does that give you more control? More than whoever you might find on gumtree or something you mean?

With the English Language school students you tend to get a choice of how long they will stay with you for, 3 months, 6 months, 9 months etc. And if it doesn't work out for any reason then you just contact the college & explain to them why you'd like the student to be moved on. Very rarely happens if ever. I hosted English Language students for many years & there was only ever one student who completely rubbed me up the wrong way as he had a very arrogant attitude & after speaking to the college, he was moved on next day.

Also with these kind of students, they have a huge respect for your property & privacy. Most of them, when not out socialising with friends, want to stick to their room to watch tv, surf the net, study etc. so they don't impinge too much & take over your life in the way that a lodger might.

Most come from quite wealthy families & basically their families just want to know that they are in a safe & secure home where they will be looked after, rather than them being totally on their own whilst in a big city in a foreign country.

PerpetualStudent

Hi - how many other people are in the block? If it's not too unwieldy, perhaps you could all get together and buy the freehold? Not something I know too much about (I'm sure others will know more?) but you can set up your own company for managing the building, then at least you know when big maintenance costs are coming, and are satisfied you've got a good quote for the work etc. Think it needs community-minded people, who don't mind giving a bit of their time, but could certainly save in uncertainty, if nothing else!

ari11

cattie wrote: »

With the English Language school students you tend to get a choice of how long they will stay with you for, 3 months, 6 months, 9 months etc.

Hi Cattie-
How do you find these students? Is there a website or do you contact certain language schools (and if so, which ones)?
I wouldn't mind giving this a try as I will be looking for a lodger next year.