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New build flat or ex-council flat in light of EWS1 and upcoming fire and building safety bills?
HannahFlanagan0508
Posts: 1 Newbie
Hello! This is my first post, I hope someone here will give me some advice.
I have 140k cash from a sold property and I have been looking for a flat to invest. This cash I have is for buy to let investment and I am not planning to have any mortgage on top, as I already have mortgage on our current home in London, I don't want to stretch the finance further.
I have been looking around in Birmingham area, I realize this cash I have is not enough for buying a freehold, although a lot of flats are very cheap at the moment, I concern about the risks of future hassles and financial drains in relation with the EWS1 certificate, and the upcoming fire and building safety bills.
So after I screen out a lot of flats, I now have two choices:
1, A new build flat which will have EWS1 form on completion. Service charge approx. 600 pounds/ year, 150 pounds/ year ground rent, 140 years lease
2, An ex- council ground floor flat in a two story flat, solid brick walls, has its own entrance way. It was built in the 1960s and has a typical 60s look. 10 pounds ground rent/ year, approx. 300/ year service charge.
My thinking: They both situated in nice area, each has its pros and cons- New build will attract better tenants sometimes and get a higher rental income, buying process is relatively simpler too, up to date with all regulations (although no guarantee of future changes and cost); The ex council flat is about 40k less in price, and will be low cost to keep, where the new build may have service charge rising over time, and I may never able to gain this extra 40000 return in future, as property market is definitely slowing growth speed now.
What do you think, from an investor and less risk perspective, which one would you go with?
I have 140k cash from a sold property and I have been looking for a flat to invest. This cash I have is for buy to let investment and I am not planning to have any mortgage on top, as I already have mortgage on our current home in London, I don't want to stretch the finance further.
I have been looking around in Birmingham area, I realize this cash I have is not enough for buying a freehold, although a lot of flats are very cheap at the moment, I concern about the risks of future hassles and financial drains in relation with the EWS1 certificate, and the upcoming fire and building safety bills.
So after I screen out a lot of flats, I now have two choices:
1, A new build flat which will have EWS1 form on completion. Service charge approx. 600 pounds/ year, 150 pounds/ year ground rent, 140 years lease
2, An ex- council ground floor flat in a two story flat, solid brick walls, has its own entrance way. It was built in the 1960s and has a typical 60s look. 10 pounds ground rent/ year, approx. 300/ year service charge.
My thinking: They both situated in nice area, each has its pros and cons- New build will attract better tenants sometimes and get a higher rental income, buying process is relatively simpler too, up to date with all regulations (although no guarantee of future changes and cost); The ex council flat is about 40k less in price, and will be low cost to keep, where the new build may have service charge rising over time, and I may never able to gain this extra 40000 return in future, as property market is definitely slowing growth speed now.
What do you think, from an investor and less risk perspective, which one would you go with?
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Comments
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@hannanflanagan05 This is based off of the very limited information in your post. If the choice were between these two, most of my BTL clients would likely go for the two-storey council flat.
I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
PLEASE DO NOT SEND PMs asking for one-to-one-advice, or representation.
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