Purpose Built Flat vs. Conversions

Gibble

Hi

I have been looking to buy a house in east london and with my budget can only really afford flats. I prefer flats in victoria conversion where you tend to not have service chargers but they are more expensive. I have looked at some purpose built flats but I am not too sure what I should look out for.

For instance I have seen a purpose built flat, 13 years old which I like, top floor (3rd floor), 114 years on the lease. Should I be worried about service charge going up to replace roofs, or a general increase in maintenance? Aside from checking if the communal areas are in good condition I am not to sure what to look out for in purpose built flats?
What are the risks buying a purpose built flat.
Any ideas?

Thanks

eddddy

Gibble wrote: »

I prefer flats in victoria conversion where you tend to not have service chargers but they are more expensive.

It's often the opposite.

Victorian properties are obviously very old, so they tend to need a lot of maintenance and repairs.

Whereas modern purpose-built blocks are newer, so typically need less maintenance and repairs.

So service charges for victorian conversions can often be higher than for modern purpose built blocks.

Gibble wrote: »

Should I be worried about service charge going up to replace roofs, or a general increase in maintenance? Aside from checking if the communal areas are in good condition I am not to sure what to look out for in purpose built flats?

If you're concerned about major repairs, you can get a surveyor to look at the building.

If the building is managed by a large professional company, they may have a schedule of planned maintenance and repairs for the next few years, which your solicitor will get if you start the purchase process.

Things like large communal hallways and large communal gardens (and lifts, concierges, residents' gyms etc) will obviously increase service charges.

The lease will probably specify how often the communal areas need to be redecorated, etc.

Your solicitor should also get the last 3 years of service charge accounts during the purchase process, so you can analyse the costs.

phill99

The good thing about buying a flat in a purpose built block with a service charge is that the lease and management company become the vehicle for block maintenance and repairs. Typically there is a cleaner for common parts, a gardening contract to sort out the planted areas (if any) and a lease that will identify cost apportionments, charging structures etc. Flats created from house conversions often have no vehicle for repairs and maintenance which means that routine repairs don't get dealt with. There are also arguments about parking bike and prams in common areas and the like.


Just because a flat doesn't have a service charge, don't think you wont have maintenance costs.

Gibble

Thank you both for your replies and advice.

Much appreciated, buying a property is so hard.

AlexMac

I'm intutively drawn to Victorian buildings, and the majority of house and Flats I've owned have dated from 1850-1915... but there are lots of other factors.

And the 1986 property I now live in is a joy; no draghts, better insulation, low maintenence and walls which are flat and true!

Victorian conversions almost inevitably have the original suspended floors; timber floorboards on joists, so there is lots of noise transmission both ways, even if the leases demand carpets. That can often cause friction or conflict between neighbours over waht is, or isn't reasonable.

The other factor for me is who the freeholder is, what the service-charges are, what they cover beyond the obvious of buildings insurance and how much control I have.

My personal ideal is so-called "shared freehold", and preferably self-management by a Company made up of me and the other leaseholders as members or Directors, rather than the arrangement where a remote freeholder sees the opportunity for profit or manages the gaff via an unaccountable agent who factors their fat fee into the Service Charge.

Whether or not that's the case, I'd want to know what the service charge covers; routine maintenance or contributions to a "Sinking Fund" for major future stuff like cyclical maintenance (esp External Decorations ) and how things like major repairs are funded? Especially if this might cover Lifts, estate roads, landscaping, concierg services or gyms? If purpose built, is it Conventional Construction (brick walls and pitched slate/tile roof) or potentially more expensive system built/ flat roof construction? If high rise or cladding is involved?

In practice, my service charges for self-managed flats have ranged from £420 -£1,400 p.a, but that included a healthy sinking fund contribution. Two little ex-Council 2-bed flats I still own as BTLs have Service Charges of a reasonable £600-800 pa, but tend to require £5k one-off charges every 7 years or so for external decor, replacement windows, etc. And they're in low-maintenance low rise blocks.

Whereas mates had to ditch their riverside purpose build 2-bedder as SCs imposed by the Freeholder's Management Agent spiralled to £5-6k p.a.

One problem is that you can't trust Estate Agents to answer Qs about SC costs, past or planned works and management arrangements. I tend to walk away if I can't get reasonable or even partial replies before lashing out hundreds in legal fees, searches & formal enquiries via a solicitor.

But I'm probably making this more complicated that it is- happy home-hunting

eddddy

AlexMac wrote: »

My personal ideal is so-called "shared freehold", and preferably self-management by a Company made up of me and the other leaseholders as members or Directors...

Yep - but just for balance...

A BTL LL with 20+ properties was telling me that he had just one shared freehold (the rest are all 3rd party freeholds) - and the one shared freehold caused more stress and aggravation, and took up more time, than all the other properties put together.

Essentially because, the joint freeholders:

• Knew nothing about leasehold legislation
• Knew nothing about building repairs and maintenance
• Kept coming up with 'wacky ideas' that they wanted to spend service charge funds on

For example, when one of the joint freeholder's friends (who happened to own a roofing company) said the building needed a new roof.

So everyone started panicking and spent weeks working out how much each leaseholder would have to pay, etc, etc.

It didn't occur to them to get a second opinion. But when they eventually did, they found out that a minor roof repair would fix the problem.

Retired_Mortgage_Adviser

As a portfolio LL myself, with a couple of properties in Leytonsone and Redbridge, I will echo the above about shared-freehold "zero service charge" flats.

Plenty of very pretty and spacious flat conversions in these areas (especially E11) but the ease of managing these properties will depend hugely on how co-operative, knowledgeable and cash-rich/poor your fellow freeholders are.

To let out, I personally would pick a well-managed purpose built block over a flat conversion any day.

To live in, it would depend. Many flat conversions are done tastefully, retaining a lot of character from the original house. This may be sufficient to compensate for the potential future issues with management. I myself would not go ahead with a flat with more than one other freeholder or where the other flat is already let out.