FTB - Should I pull out?

greentea2020

HI all,
I'm about to exchange on a flat in London - it's a small ex LA that needs a fair bit of work to look nice again. I'm very skeptical about it now given the current climate and volume of works needed, around 15-20k - which although I do have I'm scared of spending in one go as that's all that I have in the bank left after I pay the deposit.
Vendor has said that if it doesnt happen he wont put the flat back on the market for a while - he's not in a rush to sell, so I don't really think I can reduce my offer price.
I am worried about the money but I do think it's my first flat and it would be a lot better than living in a rented flat - even if it does go down in value a bit in the imminent term. Then there's the worry of "am I gonna have a job in a few months?" - I work in tech, have a decent salary but my job is dependent on the retail market
I'm confused about it and not really sure what to do...

hazyjo

Okay, let's address the ex-LA bit cos that will determine any advice I give.

Is it in a large block? Is there a lift? Any works obviously need doing (windows, roof, painting, etc)? Any cladding? Is there a service charge, or do you just get billed as and when? Are there still council tenants or is it all privately owned?

greentea2020

hazyjo said:

Okay, let's address the ex-LA bit cos that will determine any advice I give.

Is it in a large block? Is there a lift? Any works obviously need doing (windows, roof, painting, etc)? Any cladding? Is there a service charge, or do you just get billed as and when? Are there still council tenants or is it all privately owned?

20 flats 
No lift
Some works scheduled in 2 years time - decorations and fixes on the roof
Service charge - £55 pcm
Council tenants are still there, just 6 flats are privately owned

hazyjo

Roof work and decorating would worry me. Have they given an estimation of costs? How many storeys? It's the scaffolding that will make it pricey too. So not much s/c then - do you know if there's a sinking fund?

greentea2020

It's 4 stories (ground included), no estimation of cost. They showed me the cost for these types of works in a nearby block and it was between 4-5k per flat, done last year.
There is a sinking fund, yes.

hazyjo

Do you have that money spare? From my experience with friends in ex-LA flats, it's always way more than anticipated. My friend's was nearly double the estimate for windows and run into 5 figures per flat (I seem to remember).

greentea2020

I do but it’s in shares so it’s gone down in value...

Doozergirl

greentea2020 said:

I do but it’s in shares so it’s gone down in value...

My friends had their money in Icelandic banks in 2008.  They pulled their money out and put it into a flat London just before the banks went bust.  The flat just sold for nearly double what they paid.  

They were very lucky not to lose their deposit. 

They're perhaps not that lucky that house prices rose, because they've had to pay a LOT more for the house that they have bought.  We are obsessed with falling house prices, but it does make the differential smaller when you move up, even if yours has gone down.  

I've never regretted owning a home.   We all have to pay to live somewhere.

 Even if things do go wrong, I think the banks will have to hold off their approach, which isn't too heavy handed anyway if you communicate with them.  Frankly, I'd rather be at the mercy of a lender than of a landlord if the poop hits the fan.  

If I were to cut down on anything, home ownership would be the last thing, even if my house wasn't worth as much as I paid.  I'd give up everything else to keep my own home.  It's so different from renting.  

greentea2020

Doozergirl said:

greentea2020 said:

I do but it’s in shares so it’s gone down in value...

My friends had their money in Icelandic banks in 2008.  They pulled their money out and put it into a flat London just before the banks went bust.  The flat just sold for nearly double what they paid.  

They were very lucky not to lose their deposit. 

They're perhaps not that lucky that house prices rose, because they've had to pay a LOT more for the house that they have bought.  We are obsessed with falling house prices, but it does make the differential smaller when you move up, even if yours has gone down.  

I've never regretted owning a home.   We all have to pay to live somewhere.

 Even if things do go wrong, I think the banks will have to hold off their approach, which isn't too heavy handed anyway if you communicate with them.  Frankly, I'd rather be at the mercy of a lender than of a landlord if the poop hits the fan.  

If I were to cut down on anything, home ownership would be the last thing, even if my house wasn't worth as much as I paid.  I'd give up everything else to keep my own home.  It's so different from renting.  

Thank you. I needed to hear this