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Ex-council flat with major works – take the risk or run a mile?
jeffling
Posts: 7 Forumite
Evening all,
My wife and I (first-time buyers) viewed a great ex-council flat yesterday.
Very large, good condition (to our untrained but informed eyes, at least), fantastic location and well priced for the area.
The vendors have lived there 5 years, but, according to the agent, they've found a new place they love and are desperate for a quick sale. So potentially a real bargain to be had.
It all seemed perfect on the surface. But the longer we looked around, the more it felt like there was a huge BUT coming.
And sure enough, it came. Major works to the roof are about to start, estimated at £22k per leaseholder. So no wonder they're desperate to get out.
The agent said there are several repayment options: interest-free for 60 months, a 10-year council loan, or an equity loan (where the council receives a share of the future selling price). None of which are exactly enticing.
However, given the vendors' desperation to sell, the agent said it's bound to sell for way, way below the asking price (it's on the market for £300k).
So now we're torn. The major works thing is obviously terrifying, and what's to say there won't be another massive bill in a couple of years' time? We simply don't have the money for that.
But at the same time ... we wouldn't keep the flat for more than 5 years. If we could buy it for, say, £270k, we could absorb the cost of these roof works. And if nothing huge comes up in the next couple of years (big 'if,' I know) we'd stand to make a good profit.
The block itself is small – 2 floors, 6 flats – and is a simple brick construction. No lift. So perhaps that reduces the chance of other expensive works being needed in the next few years.
What do you think? A risk worth taking, or one to leave well alone?
My wife and I (first-time buyers) viewed a great ex-council flat yesterday.
Very large, good condition (to our untrained but informed eyes, at least), fantastic location and well priced for the area.
The vendors have lived there 5 years, but, according to the agent, they've found a new place they love and are desperate for a quick sale. So potentially a real bargain to be had.
It all seemed perfect on the surface. But the longer we looked around, the more it felt like there was a huge BUT coming.
And sure enough, it came. Major works to the roof are about to start, estimated at £22k per leaseholder. So no wonder they're desperate to get out.
The agent said there are several repayment options: interest-free for 60 months, a 10-year council loan, or an equity loan (where the council receives a share of the future selling price). None of which are exactly enticing.
However, given the vendors' desperation to sell, the agent said it's bound to sell for way, way below the asking price (it's on the market for £300k).
So now we're torn. The major works thing is obviously terrifying, and what's to say there won't be another massive bill in a couple of years' time? We simply don't have the money for that.
But at the same time ... we wouldn't keep the flat for more than 5 years. If we could buy it for, say, £270k, we could absorb the cost of these roof works. And if nothing huge comes up in the next couple of years (big 'if,' I know) we'd stand to make a good profit.
The block itself is small – 2 floors, 6 flats – and is a simple brick construction. No lift. So perhaps that reduces the chance of other expensive works being needed in the next few years.
What do you think? A risk worth taking, or one to leave well alone?
0
Comments
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I wouldn't touch an ex.council flat where the council is still the freeholder. The agent will say whatever they think you need to hear to get a sale.
I'd look elsewhere to be honest, I know it's hard to hear but honestly I really wouldn't even entertain the idea.0 -
The works are estimated at £22k per leaseholder. They could be more and there could be more bills to come. This is one of the known problems with buying an ex council flat.0
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so probably a RTB vendor and now regretting it, karma bites back"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
With leasehold you’ll never really know what your costs will be until the consultation documents and demands come through the door.
Also, you say there’s no lift etc. I would add ‘yet’ to that. You don’t say how many flats are leasehold and how many are still occupied by Council tenants but say they only have one flat and they decide to move someone in with mobility issues. They may decide a lift is needed. And guess what, it’s an improvement to the building and therefore probably covered by the service charge provisions. The Council get a new lift in their building and potentially only have to pay 1/6 of the cost with the leaseholders coughing up the rest.
I would steer clear of leasehold in general. I would definitely steer clear where such major works are about to take place. Who knows what they may find when the roof comes off. The costs could spiral.
If you do want to go ahead, make sure the seller has offered the flat back to the Council and they have the relevant certificate before you go spending any money on solicitors and searches etc.0 -
The roof price seems way over the top, are only 3 privately owned and subing for 3 council flats.
is it a flat roof or tile.0 -
Highly unlikely a council freeholder would install a lift into a property to accommodate someone with mobility issues. In the unlikely event it was possible to retrofit a lift even a council would consider it impractical. The tenant with mobility issues would be rehoused in a suitable property.Also, you say there’s no lift etc. I would add ‘yet’ to that. You don’t say how many flats are leasehold and how many are still occupied by Council tenants but say they only have one flat and they decide to move someone in with mobility issues. They may decide a lift is needed. And guess what, it’s an improvement to the building and therefore probably covered by the service charge provisions. The Council get a new lift in their building and potentially only have to pay 1/6 of the cost with the leaseholders coughing up the rest.0 -
£132,000 seems a lot but possibly a flat roof is being replaced with tile.The roof price seems way over the top, are only 3 privately owned and subing for 3 council flats.
is it a flat roof or tile.
Private owners will not be "subing" the council owned properties. The costs will be split equally between all properties.0 -
Norman_Castle wrote: »Highly unlikely a council freeholder would install a lift into a property to accommodate someone with mobility issues. In the unlikely event it was possible to retrofit a lift even a council would consider it impractical. The tenant with mobility issues would be rehoused in a suitable property.
The point was more the complete lack of control that a leaseholder has, despite still having to pick up a share of the bill.0
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