Purchasing Ex-Local Authority in London & CPO

Erkahj

Hi All,

A second post about my first purchase!

Just a quick summary of my current situation - mortgage offer has been agreed, not exchanged contracts yet, waiting my home buyer's survey report and majority of searches have been completed.

As I've mentioned on my previous post I'm buying an exlocal authority flat in Crystal Palace. I'm very happy with it and think it's great value for money and I'm not too worried about the whole ex-local stigma.

What I AM worried about now however, thanks to my Dad reading way too many awful news articles and scaring me, is all the press around Compulsory Purchase Orders on London Council housing particularly due to all the changes done in 2016.

I guess my question is, is it really as bad and as likely as it seems? What type of council estates are councils targeting (if any)? From what I've seen most articles are saying it's the big run-down 'sink' estates. The flat I'm buying is part of a relatively small block of council houses (10 flats x 3 buildings, so 30 2 bed flats in total) so figured we wouldn't be worth the hassle, but I've no idea!

Hoploz

What are the horror stories? Surely if it's compulsorily purchased then you'll get market value so you shouldn't lose out

Erkahj

Hey Hoploz,

The horror stories are that 'market value' isn't really 'market value' and that you don't really have any power to negotiate.

An excerpt from one article

'Hendon (worth £347,000), opening offer £130,000, final offer £214,000
Heygate (worth £355,000), opening offer £114,000, final offer £164,000
Colville (worth £270,000), opening offer £120,000, final offer £150,000
Woodberry (worth £330,000), opening offer £130,000, final offer £158,000
Data obtained by campaigners at the Aylesbury estate under the Freedom of Information Act found Southwark council paid £147,500 for a four-bedroom, 97 sq m maisonette. The average house price in London at the time had just had hit £400,000.

At the West Hendon estate in Barnet, some leaseholders were offered just £90,000 for a one-bed flat and £130,000 for a two-bed maisonette when the council applied for the first in a series of compulsory purchase orders.'

I've seen similar figures on a number of articles.

sal_III

It's not a Daily mail article is it? If the figures above are correct I would assume the Lenders would have kicked quite the fuss and they are not so easy to shrug off.

davidmcn

How have the "worth" figures been assessed? The difficulty is more that in many of these cases the properties are already rundown (or e.g. structurally defective) so whatever you get from a CPO isn't likely to be enough to go and buy a replacement.

sal_III

Did some google searches on the mater, seems like in at least some of these cases (haven't bothered researching them all) the initial low offer was revised after independent survey. So doesn't lool like they ended up out of pocket. The complaint of the owners were mainly that they won't be able to afford a new property in the replacement building.

Well duh... You can't expect to sell a rundown council flat for the price of a new build.

It smacks of "social cleansing" - yes, but is not shortchanging.

bouicca21

I suspect you are thinking of places like the Ferrier Estate which has been demolished and rebuilt as the more upmarket Kidbrooke Village.


The Ferrier Estate was ghastly. To my mind Kidbrooke Village is also ghastly but in a very different way.


Unless the estate you are looking at is being described as one of the worst and most deprived areas in Europe, you are ok. The thing to look out for is a decision to carry out expensive maintenance - roofs, lifts etc, which can all be mouthwateringly expensive. OTOH Crystal Palace is a nice place to live.

hazyjo

bouicca21 wrote: »

The thing to look out for is a decision to carry out expensive maintenance - roofs, lifts etc, which can all be mouthwateringly expensive. OTOH Crystal Palace is a nice place to live.

Was going to say the same. They often do this as a matter of course. Plus they often pay high amounts for works. I would make sure I had plenty of savings if considering buying any ex-LA property! They love to change a window too, and paint or change exteriors. Lots of posts on here, although maybe not so easy to search for.

Erkahj

Thanks all and ta for doing the research into it as well!

The thing to look out for is a decision to carry out expensive maintenance - roofs, lifts etc, which can all be mouthwateringly expensive

Yeah, I've already had a bill for £2k for external decoration works. To be honest, if it stops it looking rundown - thus reducing likelihood of it being torn down - I'm on board! No lifts either, it's only 4 stories (but flats are split level), I've heard of expeeeeeensive bills due to lifts.

OTOH Crystal Palace is a nice place to live.

Yes love CP. Which is why I compromised Ex-local, buuuuuuuuutt the place is genuinely nice, has a garden and two decent sized double rooms. I looked further out - Anerley, Norwood Junction... didn't like the vibe and not great places for my commute. Being between Gipsy Hill Station and CP Station was good for me and my other half, I go into City and she goes out to Croydon - so win win

Thanks for all this info, nice to have something relatively optimistic to go back to my Dad with!

hazyjo

I have a good friend on Highland Road. 'Yours' is prob very nearby! She likes it round there a lot They've been there years now.

Erkahj

How have the "worth" figures been assessed? The difficulty is more that in many of these cases the properties are already rundown (or e.g. structurally defective) so whatever you get from a CPO isn't likely to be enough to go and buy a replacement.

That's true, for me it's just a first step on the ladder, I just want to make sure I can sell on my own terms when I'm in a position to move on and UP.

I'd hate to be forced to move on when I'm not ready yet and have to shell out on stamp duty etc etc on a property which is just a replacement.