buying ex-local authority flats

Jabberwk

Hi,

Quite a few of the properties within our budget (for buying) in our area are ex-local authority. Mostly maisonettes, not the prettiest blocks on the outside, but nice inside, and generally in fairly convenient locations and, which is the big factor, in many cases quite a lot cheaper than other properties of a similar size in the area. However, since I started lurking on this board I've seen quite a few horror story posts about being unexpectedly landed with huge bills because the local council owns other properties in the building and does renovations that are either more expensive than they should be, or aren't strictly necessary, and that the private flats in the building also have to contribute to. Sorry, that's worded rather badly. So I wondered if anyone knew just how common this is. Would you consider buying an ex-local authority flat, or would this risk make you run a mile? Is it one of those cases where it seems like a bigger risk than it is, because people only bother talking about bad stuff, not good stuff? Are there other risks I should be aware of? I'm a first time buyer, and none of the places I've rented over the years have been in ex-LA blocks so it's completely uncharted territory for me.

kingstreet

The biggest "risk" surrounds concrete-built tower blocks where lift replacement can be a major expense. Here, mortgage lenders have issues over what floor the flat is on and the percentage of the block in private ownership.

Smaller brick/tile buildings such as maisonettes will still need maintenance and you can find out from the council what repairs or improvements it plans, so you will be aware of potential repair bills. During the purchase process, your solicitor will also be asking the vendor's solicitor about such plans.

Make sure you keep your eyes open, perhaps talking to potential neighbours in the vicinity to see if they've heard of any potential developments with the council.

Nick_C

I had a one bedroomed ex LA flat in London 9 years ago, and was given notice of estimated service charges of £18K for improvement work. This was major regeneration of an old medium rise estate (4 storeys, no lift), and covered new roofs, front doors, entry phones, painting, pointing, and catching up on R&M. I was selling the flat at the time, and had to reduce the sale price.

Find out whether any major refurbishment has been carried out in the last 10 years, and whether any is currently planned. Try and get an idea of the general state of R&M. It may be worth paying for a more extensive survey that your lender requires.

Although it will be cheaper to buy on a LA estate, you will also get less when you come to sell. On the plus side, LA properties are often more spacious than modern private sector homes.

Lizling

The big difference with buying ex-council compared to a normal leasehold is that there's no sinking fund for big repairs, so instead of paying into a pot each month in the form of a higher service charge, you can get hit with a big repair bill all in one go. It isn't necessarily any more expensive overall though, and I doubt you'd would have to pay it all upfront anyway. I've got the option of paying in installments, upfront or put a charge against the flat for the next big bill and I'll have had about 2 years notice to save up for it. I think there was a loan option too.

But, I would be a bit worried if no work had been done in years. £18k would be horrendous!

cattie

I'd be very wary of ex council flats, unless all flats in the block had been bought & were now privately owned.

What you've heard about big charges for repairs & maintenance is very true. My sister used to own an ex council maisonette & was landed with a bill in excess of £9k for security measures they were installing on the development. Another time they had a bill for around £3k for painting the external & communal parts of the block.

As mentioned by kingstreet, if buying ex council, the solicitor will ask if there are any major works in the pipeline, but this only covers the following 5 yr period. Of course this will be planned works they are asking about, & you need to be aware if a sudden problem arose, say to the roof for instance, then you could unexpectedly face a big bill for your portion of the works.

There is a bit of a stigma concerning ex council properties, which means that it won't appeal to as many buyers as a private development would when you come to sell.

The good thing about ex council flats is that you do usually get more space for your money. Storage space tends to be pretty generous too, plus the bedroom sizes are often more roomy than some places. So these are the benefits, along with managing to get a property of it's size at a keen price.

If it's the only way you can afford to buy then it is worth thinking about, but only if it's a small block/development I'd say & always be prepared for unexpected bills for sudden works to be carried out.

Mokka

Will you have to get a mortgage? If so be warned that many lenders for some odd reason hate maisonettes.
Also many hate ex LA flats.
Quite a few won't lend on concrete blocks.
A small handful will lend on high rise and they are considered to be fussy lenders.
I wouldn't think the repairs would be unnecessary. The costs would probably be similar to a private leasehold flat, but as another poster said there is no sinking fund. I don't think an ex-council is necessarily worse than private leasehold- it's just that leaseholders are not very well protected by law. If anything you have more rights with a LA.
The best thing to do is ask the council's leaseholder services whether the block already had its Major Works done and if not whether they are scheduled for the next 5 years. Also find out what the service charge is.
Council has to consult about any works they are planning to do which would cost each leaseholder more than £250, so you would have the chance to object or question the charges.
You can also join local residents' association to join forces with others.
If it's a leasehold flat you won't have the chance to get a proper survey done, you can only get a basic valuation or a pretty useless Homebuyers Report.
Most people buy these kind of properties because they cannot afford anything else, so it really depends on your situation.
See what the mortgage situation is- if the flat is hard to mortgage you might have to sell it for cash when you want to move, which is much harder.

dooleeg171

Hi All

This actually worries me slightly. We're about to put our first bid on a 15th floor flat in an ex council building.

The difference is, there are no council tenants living there. The block is in good condition and major work has just been completed. Also, tenants pay into a monthly pot rather than be subject to the big bills as agreed in the neighbours committee.

We know what we're getting into and wish to proceed but the estate agent has told us that people have failed to get a mortgage on this property in the past. Is there anything we can do or are we at the mercy of the valuation? Other people have bought in the block recently so I'm struggling to see what the problem is. Surely they can't leave this on the market forever?

Any help would be great. We just want to do all we can to get this done.

Thanks.