Considering buying an unrenovated flat in a London Victorian house

vincent2017

Hello! I'm wondering if in the next few years I could (or should) buy the London flat I've been living in for years. It's 60 square metres and takes up the top floor of a Victorian house.

It has a 5m by 4m lounge; a decent sized kitchen that fits a dining table; a small bathroom, a 59sq foot box room (too small to legally count even as a child's room) which might be better used to extend the bathroom. Plus double bedroom at the back.

I have a couple of questions:

1) If a 1 or 2 bed flat is in need of renovation, what kind of a percentage discount might it go for compared to a renovated and restored property?

I've found the owner will pay for repairs almost without question, but never proactively spends on improvements or maintenance. So at a minimum I'd say this flat needs rewiring; new kitchen; new bathroom; new doors; new windows (rotten Victorian sashes); new light fittings; replastering ceilings and sorting out crack above bay window; and repainting throughout. In time you'd want to put the Victorian fireplaces back in, and also replace the cracked and overgrown path down the side of the house to the garden. The front of the property also needs repainting and repairing, and the pointing doing. There is also no noise insulation between floors, so you'd either need to rip the wooden floors up, insulate, and re-do the floors, or face a future problem if ever the hallway flat changes hands.

Looking at properties in an immaculate state of repair I see 1-beds in this neighbourhood go for £350k and 2-beds for £450k (though sometimes even £500k+, £600k+ if very plush and huge).

Might this flat go for enough of a discount to make all the work worthwhile, or does it just sound like a money pit?

2) Probably the owner regards this property as a 2-bed, but I think it's a generously proportioned 1-bed. How are these things decided, is it just a matter of making an offer and seeing if he'll accept it?

I wonder if £350k might be a fair price for this property with share of freehold, half the garden, and right to extend into the loft, or if that would be pushing it. I've seen renovated 1-beds on the market of just 40 square metres yet still £350k, where the lounge and kitchen are combined so actually you're only getting two rooms plus bathroom., so maybe I'm being unrealistic.

3) Given the amount of work that needs to be done but also the inaction of the current owner, am I better looking at leasehold or freehold?

The reason I'm interested is I don't think I'd be able to get a mortgage to buy a renovated property, but I might be able to afford this one and renovate it over time.

Thanks for reading and I'm grateful for your thoughts!

Elfbert

First question would be 'Does the owner have even the slightest interest in selling?'.

Because if they don't, there's no point even thinking about it.

Cakeguts

In London there is precious little difference in value between properties that need renovating and properties that don't need renovating. You don't get all of your money back on cosmetic changes that are to your taste. For example you want to put back fireplaces. Someone else might want a modern interior. This means that you don't get paid for your taste.

If you can get a cot or a child's bed in the 2nd bedroom this is a two bed flat. So to buy a flat like the one you are in you would be needing to expect to pay in the region of £450k Plus at the moment you have no idea if your landlord wants to sell the flat.

vincent2017

Elfbert, good question! About five years ago he said "You can buy this place off me if you want".

About two years ago I asked him - thinking then just about my future as a tenant - if he had any thought of selling up, and he just said "Not at the moment". But I take that to just be him not giving me any more information or commitment than he needed to.

vincent2017

Cakeguts, I understand things like putting fireplaces and ceiling roses back in are purely cosmetic.

But renovations to get it to meet the building regulations which it currently won't, I'd have thought would have been something different and more likely to have an impact on price. So for instance that there are wooden floors with no noise insulation whatsoever.

It looks like according to Section 236 the Housing Act the box-room counts as 0.5 of a room:"

"50 sq. ft. or more but less than 70 sq. ft. = ½"

always_sunny

I would have thought it'd go on the market and the price will be determined by the demand.
The fact that you lived in it may present very little to the seller. I am sure you're a great person but if selling to someone else will pocket them an extra £15k...unless of course you're social with the LL, maybe it's different.

vincent2017

I suppose it comes down to this: Would the owner sell it to me in a private sale without first opening it up to see what it would fetch on the open marketplace.

If so, then it might be worth buying.

If not, and if the surface condition of a property isn't that important, then I'm better off looking for somewhere that's in better nick and hasn't been starved of maintenance over the past few decades.

vincent2017

Thanks for that, always_sun. My impression of the owner is that he is a wealthy man with various businesses he's set up, and this property (originally his childhood home; he knows it inside and out but seems totally unsentimental) is just not on his radar. He wants it to take care of itself without him having to do anything (which largely it's managed to - cheap rent and good location). I've helped in that by taking care of all the repairs (finding and overseeing tradesmen) as well as recently finding him tenants for one of the other flats. It might be he would be interested in selling me the top flat, and formalising that I'll manage the two below it for him.

Right now if he renovated the house he could receive an extra 33% in rent per flat, paying off the expense in three or four years, but he shows no interest in doing that. So it might be that he would take a sensible-sounding offer without bothering to put it to market.

AdrianC

vincent2017 wrote: »

But renovations to get it to meet the building regulations which it currently won't, I'd have thought would have been something different and more likely to have an impact on price.

Building Regulations change all the time. The VAST majority of properties won't meet the current regs in a multiplicity of ways, unless they've only just been fully refurbished.

It looks like according to Section 236 the Housing Act the box-room counts as 0.5 of a room:

Lovely, an' all, but that's completely irrelevant unless you're claiming you're overcrowded, or the number of rooms is relevant for claiming benefits.

AFF8879

I have had a great experience of doing this. I bought my 1 bed flat in London last year and have been renovating it since. There weren't any huge/structural issues, but so far I have installed all new electric fittings (rewire not needed), plastered, new lights, new doors, new flooring and plush carpet to bedroom / living room, redecorated throughout and installed a new bathroom. Next month I am having a new boiler fitted and then installing a high-end kitchen (which I can only afford to do as it's 2.5x2.7m - but is separate from the lounge which was an important requirement for me - I hate open plan!)

It's basically enabled me to have a lovely flat in a central location which I otherwise would not have been able to afford - plus the benefit of doing everything yourself is that it would be to your own taste.

I remember seeing a few flats when I was searching that, for example, had an amazing high spec kitchen but with gareish bright-red units. It was a lot pricier than the place I eventually bought and even if I had of gone for it, I couldn't bring myself to rip out such an expensive kitchen no matter how disgusting (to me ) it looked....

Renovate, renovate, renovate!!

vincent2017

That's encouraging to hear, AFF8879. Were you able to buy at enough of a discount to make it worthwhile? Was it leasehold or freehold? And did you compete for the property on the open market?