buying first flat in edinburgh

gordon_wilson

Me and my brother (single) inherited money from out parents this year. We have savings and pensions and will inherit about 300k each. My brother looking to stop renting and get a flat or house himself. My impression from speaking to some shrewd folk is best it is best to spend most, about 2/3s? on house/ flat as dont want to have to invest alot of money which will lose its value in ISAs etc. So have value of money mostly safe in one property which can release later downsize if need be. Also I get the impression it is better to get a nice flat in older tenement, maybe 1930s or earlier because building standard quality of new properties is not as good and low ceilings. For the same reason I am thinking of selling small flat and get a larger better quality one. Advice please

jonnygee2

My impression from speaking to some shrewd folk is best it is best to spend most, about 2/3s? on house/ flat as dont want to have to invest alot of money which will lose its value in ISAs etc. So have value of money mostly safe in one property which can release later downsize if need be

Not sure who these 'shrewd' folk are but they are not making much sense.

Forget about investment principles for a moment. Use the money to buy somewhere you want to live in, preferably somewhere you could be happy in for a very long time. Even if you need to use it as a deposit and take out an extra amount as mortgage, its probably worth it long term if it means never having to move again.

Buying a house to live in, though, is spending it rather than investing it. If you don't want to spend it and would rather invest it, and see it grow long term, speak to an IFA.

Owain_Moneysaver

gordon_wilson wrote: »

Also I get the impression it is better to get a nice flat in older tenement, maybe 1930s or earlier because building standard quality of new properties is not as good and low ceilings.

True, but:

Older buildings can have unknown and expensive maintenance and repair bills, and there may not be a competent factor or sinking fund in place to manage this.

Some parts of Edinburgh suffer from large numbers of student / party flats with few or no resident owners in the close.

Older buildings very rarely have any parking or even accessible bin stores.

The room layout may be inconvenient by modern standards, with a kitchen crammed into a former scullery, or very odd shaped or sized bedrooms (because people didn't spend much time in bedrooms in the past, they were too cold). Modern flats are more likely to have built-in wardrobes, an en-suite for one of the bedrooms, etc.

Building standards in recent years have improved particularly in respect of energy efficiency. Old flats with high ceilings can be expensive to heat.

Older flats may be conservation area or listed, which can affect the cost of repairs and what you're allowed to do.

Also you are talking about downsizing but if you buy a nice-but-expensive flat your only downsizing option is likely to be a less-nice-and-less-expensive flat in a less-nice area. It's not like moving from a family-sized house to a retirement-sized house where there is a big difference in price for similar quality places in similar areas.

gordon_wilson

Thankyou for your reply. Trying to do several things here. Get a place to be happy in certainly. Also trying to make best use of money, (buying outright dont need mortgage). My impression is prices of eveything have been going up alot over last few years and interest rates low so money devaluing. So good flat house is also an asset which holds value better. Probably will have to move if live long enough when cant get up stairs. doesnt want ground floor just now - security. brother would want to invest totally safely, no risk, so I doubt IFA return would make money grow in real terms. I may be wrong. Personally I also want to invest ethically environmentally which I think makes growth harder.

googler

Repair bills on older tenements can be astronomical. Many tenements lack a factor to organise common repairs, and it's left to the owners to organise by team effort. If any of the owners are remote landlords, that task is complicated further.

If you want to run a car, there's precious little parking in the city, and overbearing regulation of what little there is.

My advice would be that unless you have reasons for which you MUST live in the city, to consider spending your £200k or so on a house which would be your own, a short distance outwith the city boundary.

gordon_wilson

Thanks Owain. good points, spending more not necessarily about downsizing later but keeping value of money better in property. So in better position hopefully if when want to move

gordon_wilson

Thanks googler. I have heard about high cost of repairs but I have been in tenement flat since '97 with very few problems, one roof repair that wasnt too bad. I am going to try and put together fund to do stuff that needs doing. We dont drive. Needs to be on 22 bus route to get to work very early just now.

gordon_wilson

Views please. I think I sound a bit pedantic, not mean to be. If folk think Im talking nonsense be good to hear it and why

sgun

We recently sold our Edinburgh flat, prices have certainly gone up a fair bit in the 7 years we had it but not as much as rents.

A full re-roof, slates replaced, gutters, central flat gullies, chimney repointing etc came to £800 per flat. Old style tenement about 15 mins up Leith Walk from the centre with 16 flats. We thought that was very reasonable but we did have to organise it ourselves which was a real learning curve to say the least! I can't think of much that would be more costly though. We did have three absent landlords but I tracked them down and they paid up eventually (you can find anyone on FB if you have a name and a couple of details).

If you get a tenement with council flats in then the council maintains the hallway lighting so you don't have to pay for that. The blocks of flats that went up in value most whilst we owned were the newer ones that come with gym etc in basement but the factors were around £900 a year. They will always be in demand as rentals though so probably hold their value more. We preferred the older tenements as a home though.

gordon_wilson

"The blocks of flats that went up in value most whilst we owned were the newer ones that come with gym etc in basement but the factors were around £900 a year. They will always be in demand as rentals though so probably hold their value more. We preferred the older tenements as a home though." Earlier bit is familiar. Ive not seen ones with gyms in basement. The newer ones feel a bit anonymous to me and insubstantial, a bit of character makes it feel more like a home.

sgun

gordon_wilson wrote: »

Earlier bit is familiar. Ive not seen ones with gyms in basement. The newer ones feel a bit anonymous to me and insubstantial, a bit of character makes it feel more like a home.

There are hundreds of blocks with gyms and even swimming pools. Edinburgh will always have a very strong rental market so the resale values for these will always be higher (around 33% higher than what we sold for over the same period of time).
If you want a home go for what you like, if you want an investment look for something that young professionals/international business people etc would want to live in or rent. Factor in the factor! I was strongly averse to a block with a factor as they don't often do what they are supposed to and you have no control over the repairs and maintenance.