Flat purchase - above commercial premises

hugp_14_12

Hi

I have found a nice 1 bedroom flat to buy in Reading area. I am currently a tenant to this flat and my landlord decided to sell the property. The flat is located to a very nice residential area but in the ground floor there is the Co-Operative. The entrance of the flat is independent from Co Op ( Co Op entrance is north of the building where flats entrance is south of building) with a garden, gate and parking.

After negotiation with my landlord we agreed for the price (180k) with no agency fees, where in the area they are selling about 190-195K. I like the flat, the price is good comparing with others, i have found a lender but i am worry about the commercial property and any risk that may have. My plan is to live there for a few years and then sell the property. I know that if there was a pub or restaurant instead of Co Op the price would be much lower and only cash buyers could buy the property as the lenders wont give mortgages.

Should i proceed with the purchase or is there any big risk if i want to sell it in the future in case there are not potential buyers? (Co Op lease is for 10 years). There is no noise and Co Op at the moment is a benefit as you can easily buy anything.
Is there any risk that i cant sell the property in the future or should i proceed with the purchase as i am a tenant there and the flat/area is nice?

jbainbridge

There is a risk buying anywhere ... you could get bad neighbours anytime. Atleast if the Coop will be there for another 10 years you are pretty safe. Sounds like you have done your homework!

Norma_Desmond

Just a thought, but make sure you can't hear the shop's refrigeration units in the flat; friends of ours have just rented a similar place and they are being driven nuts by the humming vibrations and random motors starting up.

penguine

We own a flat above commercial premises. When remortgaging last summer with Virgin Money they told us that they did not mortgage flats above commercial premises unless they were in London (which we are).

We have had mortgages previously with Nationwide and First Direct and I don't remember either of them mentioning this condition, but there may be other lenders out there unwilling to mortgage your property.

ognum

I believe that since the riots a few years back when commercial premises were set alight and major damage occurred insurers and mortgage providers have been less keen on these properties.

This may limit your future market and also keep the price down but if you get a good deal on the purchase you can give a good deal on the sale. you will also always be able to get milk!

hugp_14_12

Norma_Desmond wrote: »

Just a thought, but make sure you can't hear the shop's refrigeration units in the flat; friends of ours have just rented a similar place and they are being driven nuts by the humming vibrations and random motors starting up.

This is not a problem for as i am already tenant to this flat an it quiet. My only thought is the potential to future sale, how easy i can sale it and in which price

Another flat sold 6 months ago to this building, with a very quick sale and high price. Reading prices have been highly increased but i dont know will the situation after 2-4 years

tea-bag

hugp_14_12 wrote: »

This is not a problem for as i am already tenant to this flat an it quiet. My only thought is the potential to future sale, how easy i can sale it and in which price

Another flat sold 6 months ago to this building, with a very quick sale and high price. Reading prices have been highly increased but i dont know will the situation after 2-4 years

You have done well I live in this area and sold in 2 days prices are stupid around here! That is why I am cashing in my chips and moving to Wales

hugp_14_12

the question should i proceed with the purchase of this nice flat or after 2-4 that i am planning to sale it, the price will be lower? Co Op has a lease and it difficult to go away
At the moment in Reading there are not many available flat/house, but what will happen if near future there is availability , will come anyone to buy this flat?

Flat is nice, quiet area and for my there is advantage with Co Op as you can easily buy anything. I am conscious with the shop, as my plan is the future sale

SuzieSue

hugp_14_12 wrote: »

the question should i proceed with the purchase of this nice flat or after 2-4 that i am planning to sale it, the price will be lower? Co Op has a lease and it difficult to go away
At the moment in Reading there are not many available flat/house, but what will happen if near future there is availability , will come anyone to buy this flat?

Flat is nice, quiet area and for my there is advantage with Co Op as you can easily buy anything. I am conscious with the shop, as my plan is the future sale

No-one knows what is going to happen to house prices in the future but buying a flat above a commercial premises is obviously more risky than buying one that isn't. But this is probably the reason that you can afford this flat but you cannot afford other flats which are not above commercial premises.

If you are worried about buying a flat above commercial premises then buy one which is not, however, they will be more expensive.

So, the choice is yours - you either pay a lower price and take the risk that the Co-op might leave and you might be above a kebab shop in the future or you pay a higher price for a flat which is not above a shop.