advise for FTP, flats...

ak74

Hi Guy's..

Iv'e looked at a flat block with 6 flat's an ideal location, only one of the flat's is vacant and the freeholder is selling the flat's in there current conditions with new 999 year leases (need work here and there basically...) one of the flat's is actually very nice and I'd like to think about going for it as it needs less work doing, they have been on the market for a while due to most needing work so think I could get a good deal here as currently listed for 89,950

My question is has anyone been in this position before and how does the maintenance end up working out on the building if it needs work and not all the flat's are vacant? the ground rent is £50.00 and maintenance is payed by shop below at 34% and flat's 66% in total..

would lenders avoid this situation ?

G_M

ak74 wrote: »

Hi Guy's..

Iv'e I've looked at a flat block with 6 flat's flats in an ideal location, only one of the flat's flats is vacant and the freeholder is selling the flat's flats in there their current conditions with new 999 year leases (need work here and there basically...) one of the flat's flats is actually very nice and I'd like to think about going for it as it needs less work doing, they have been on the market for a while due to most needing work so think I could get a good deal here as currently listed for 89,950

My question is has anyone been in this position before and how does the maintenance end up working out on the building if it needs work and not all the flat's flats are vacant? the ground rent is £50.00 and maintenance is payed by shop below at 34% and flat's 66% in total..

would lenders avoid this situation ?

You'd need to read the lease to see how cost of maintenance is apportioned. But if, say, your flat had to pay 11% (one sixth of 66%) of roof repairs, then the fact that one or more of the other flats was vacant would not alter that.

cattie

A 999yr lease is great & considered a virtual freehold. However, a lot of lenders are not too happy lending on properties which are above shops.

Sometimes when a flat is above shops you will require a larger deposit if lender is only willing to give a lower LTV amount.

As GM has mentioned, the 66% of maintenance for the flats will be shared out between all of the residential properties & whoever owns the properties will need to pay their share whether flats are being lived in or not. Usually larger flats pay a bigger share than a smaller flat.

ak74

Hi Cattie,

Thanks for the reply, yes Iv'e mentioned to my broker about it being above a shop, it is slap bang in the middle of town, however it is not a restaurant or anything like that, and has it's own private entrance.

that's good to know, I'm just guessing the freeholder would pay out the % for all the flat's that have no one living in them yet...

Also would it be considered a bad move placing a low offer due to them being on the market for a while? :j

The place has several two bedroom flat's, one that is the nicest layout at 89,950 below, and then another at 79,950, would it set me up for putting in a lower offer of 78,000 on it?