Buying a house from the council CPO/Compulsory Purchase

chaotic_j

Hello,

I have seen a nice house which is being sold by the council, it's been empty for a few years. The previous owner very sadly had an accident outside, they died and some years later the property has been subject to a CPO - Compulsory Purchase Order.

It needs a lot of work doing to it and the purchaser will need to enter into a building licence to renovate the property to an acceptable standard within an agreed timescale.

I'm just wondering if anyone has some information on buying a CPO property, is it likely the council would accept a reasonable offer and to what extent might an 'acceptable standard' of renovation be?

Thanks in advance
chaotic_j

chaotic_j

Hello,

We have looked at the property a couple of times now and really like it and are going to make an offer.

A lot of money needs spending as it turns out thieves have gained access at some point and stolen most of the services amongst other items causing huge damage.

I read online that CPO properties are often sold requiring a deposit for a 12 month or so lease, if the property has been renovated according to the schedule provided, or in this case to a habitable standard i.e. bathroom, kitchen, services etc. you then pay the balance and have freehold.

When I enquired about this with the estate agent acting on the council's behalf they said the full amount is payable up front "and the council will withhold the deeds" is this correct?

The offers have to be in writing, to the estate agent on a certain day by 10am.

- I intend on delivering my offer in writing, in person just before 10am on that day.
- My offer will be cash, 20% below the guide price as I am having to borrow money from family and this is the maximum they will lend me.
- I am making the offer an odd number in case someone puts in the same offer.
- I will include proof of funds.
- I will name a solicitor who I will have instructed to deal with the purchase.

Is there anything else I should include to go in my favour? for example would stating once renovated it would be my family home, give me an advantage over say, a builder looking to make a quick buck or could this mainly come down to cash/mortgage and offer amount?

Thanks in advance,
chaotic_j

marksoton

chaotic_j wrote: »

- My offer will be cash, 20% below the guide price as I am having to borrow money from family and this is the maximum they will lend me.

If you can't afford the purchase price how are you going to finance extensive renovation?

I've only heard of CPO's being used for infrastructure projects etc. Why was the CPO filed?

chaotic_j

Hi marksoton,

Thanks for your reply. Good question - I already own a property outright and have considerable savings.

I don't have enough to buy the second property outright though, let alone renovate as well so I would be borrowing the money to purchase from family, then using my own money to renovate and in the meantime put my existing property up for sale.

Once sold I would be paying the bulk of the borrowed money back with the proceeds Leaving me owing some money to family who I estimate I'd pay back within 3-4 years.

Essentially the property has been empty 4-6 years that I know of, so I'd imagine it has been CPO'ed due to being a magnet for thieves and vandals (windows put though etc. graffiti inside so teenagers obviously been in).

I don't have loads of information other than seeing the property mentioned in some of the council's local action plans. It is in a nice area so obviously the people around it must have been putting the council under pressure for some time.

Thanks,
chaotic_j

Cakeguts

Councils sometimes CPO properties if they have been left empty for some time and are becoming a nuisance to neighbours. The idea is that they can then be sold onto a builder or someone who will repair them and make them available for someone to live in rather than left empty.

marksoton

chaotic_j wrote: »

Hi marksoton,

Thanks for your reply. Good question - I already own a property outright and have considerable savings.

I don't have enough to buy the second property outright though, let alone renovate as well so I would be borrowing the money to purchase from family, then using my own money to renovate and in the meantime put my existing property up for sale.

Once sold I would be paying the bulk of the borrowed money back with the proceeds Leaving me owing some money to family who I estimate I'd pay back within 3-4 years.

Seems a convoluted way of doing things. Just get your current property on the market.

swampydoo

hi there,

we are in a very similar situation right now and wondered how you got on?

Thanks!

swampydoo

hi there,

we are in a similar situation right now, just wondering how you got on?!

chaotic_j

Hi,

Unfortunately we did not get the house in the end. I was reliant on borrowing money from family because the property was not mortgageable due to not having a functioning kitchen. Had a good chunk of what I needed to buy it, but wouldn't have been able to afford to do it up without help.

When it came to put an offer in I had an amount in mind i.e. 10% above the guide price but my family decided I could only offer 20% below the guide price - basically there was next to no chance..

I didn't get a call from the estate agent to say the offer had been rejected. When I called they said that they had about 30 offers in total with a couple of offers around the asking price and were proceeding with one that was very strong.

I won't know how much it went for until the new owner has completed the work and it gets transferred into their name, but I think it would have been for say 10% more than the guide price, at the most.

It was an amazing house but a really big undertaking. I'd recommend 10% over the guide price if worth it and you really like the property.

We have since tried to buy the house two doors down which came up for sale undervalued in my opinion.. family were supportive and we offered 10% above the asking price at best and final offers.. didn't get it.. went for 12% above the asking price!

Tomorrow we are looking at another house - the most expensive so far but really interesting.. it's this silly modern method of auction though! That's actually why I've come on here, to post a thread for a bit of advice..

Good luck!!

chaotic_j