Will high-rise rents now weaken?

chucknorris

westernpromise wrote: »

You'd be crazy to buy in an LA block unless it had only just been done up.

At any time they could decide to spend £10 million doing up 80 flats and hand you a bill for £120k. You'd have no way of stopping it. Huge risk (which as we all know no landlord has ever taken).

I bought 4 (but sold one last month), one is in a block of only 4 flats and we (the 4 leaseholders) bought the freehold about 10 years ago. The other 2 are in a very decent low rise block, of only 5 storeys, which is much longer than tall, with multiple entrances/stairwells, and it is brick (not plastic clad). In 26 years I have had 2 major works bills, £5.2k for double glazing and redecoration of the common areas and £7k for roof repairs and again redecoration of the common areas. But I have always recognised that risk exists, although with this block being brick clad, it was never a high risk.

There are plenty other flats in the vicinity in tower blocks though that only have one entrance/stairwell and some do have plastic cladding, I would be very concerned if I had bought some of those. I never did like those though, in the past I've lived in my flats for a total of about 12 years, so they weren't just investment properties, they were also my home too.

lisyloo

You'd be crazy to buy in an LA block unless it had only just been done up.

Wasn't Grenfell tower done up fairly recently (apologies if I missed any sarcasm).

Huge risk (which as we all know no landlord has ever taken).

Ah that's definitely sarcasm.
Having said that our flat has gone up at least £250K in about the last 8 years, so they wouldn't be out of pocket even with the £100K-£120K bills mentioned.
A big risk at the time though (I think ours was originally a home).

teddysmum

lisyloo wrote: »

Wasn't Grenfell tower done up fairly recently (apologies if I missed any sarcasm).



Ah that's definitely sarcasm.
Having said that our flat has gone up at least £250K in about the last 8 years, so they wouldn't be out of pocket even with the £100K-£120K bills mentioned.
A big risk at the time though (I think ours was originally a home).

Those huge price hikes aren't universal, though; certainly not where we live.

lisyloo

teddysmum wrote: »

Those huge price hikes aren't universal, though; certainly not where we live.

Sorry was being London centric, where ANY property that avoids a horrendous commute has some value.
Personally I think I would take a miniscule chance of being burned alive over a horrendous commute every day, so I think the answer to the question is that ANY thing remotely habitable (container, boat, cupboard) etc. in central London has a value to tenants.


I'd be less likely to take an upper floor apartment if there was one lift because of the much more likely lift breakdown scenario and having to do 20 sets of stairs with luggage/shopping.


It would be less desireable for me but I have a choice.
There are enough people that don't.

always_sunny

why would they go down?

BobQ

lisyloo wrote: »

Won't owners be trying to offload these before they get told they have to spend millions on sprinklers/cladding etc.

Sprinklers are not that expensive to install

Cladding is not an issue unless you chose to install it. If you do it needs to meet the regulations. Leaving the building ugly is not an expense. Removing the wrong cladding may well cost money but its better than being sued.

lisyloo

always_sunny wrote: »

why would they go down?

If they are privately rented then reduced demand as they have become less desireable.
I live in a social housing block and I have a choice at my price point.

Obviously some of these blocks are social housing and some tenants have no choice.

lisyloo

BobQ wrote: »

Sprinklers are not that expensive to install

Cladding is not an issue unless you chose to install it. If you do it needs to meet the regulations. Leaving the building ugly is not an expense. Removing the wrong cladding may well cost money but its better than being sued.

But you don't have a choice if you are a leaseholder, the liability is unlimited - that's the risk.

Can you get 3rd party liability insurance as a landlord?

Herzlos

lisyloo wrote: »

If they are privately rented then reduced demand as they have become less desireable.

Could they be any less desirable than a few weeks ago?

Conrad

lisyloo wrote: »

Won't owners be trying to offload these before they get told they have to spend millions on sprinklers/cladding etc.

And if anything, rents will rise to cover these costs.


I have considered investing in high rise flats but was always deterred by lack of long term durability, as most are made of concrete which is not great in UK weather (and one reason most mortgage lenders wont touch this property type)


Never really understood why investors chase slightly higher yields on those ex-council concrete monsters given all the extra future costs and risks involved


Galliard Homes Conversions; I wanted to mention that I find a lot of conversions to be quite poor, for example those by Galliard. No wonder they have to spend so much on advertising trying to shift them. For my money, purpose built flats tend to be far superior these days (in terms of large blocks), than conversions of old office blocks.


4 office block conversions have recently been done in my area and all 4 have ended up pretty poor.