Have I overpaid on this flat?

snowqueen555

I've had an offer accepted on a flat in Bristol, main concern is it is above shops. Let me preface this by saying this a big compromise, I have bid on several properties before this that had central heating, driveway, their own front door, garden (all the benefits I should be looking at), but each time I have been outbid.

I am aware of the risks associated with buying above properties, I'm sorta wondering if I've overpaid or made a big mistake. I do like the area, it is 30m walk into the city centre. It was reduced from £185K  and I got it for £173k.


EPC D - poor heating, but very good wall and roof insulation.
45sq m
£65 pm service charges, no ground rent, 999 yr lease
Electric heating.
No parking.
Shared enclosed courtyard.
Top floor 
On the high street
Good cosmetic condition, no decorating required.

Thanks

TheJP

Have you exchanged contracts and completed?

snowqueen555

Nope, offer accepted last week so just got a conveyancer in place and broker finding me a mortgage at the moment. The market has changed in the last 2 weeks, making me a bit jittery but definitely more prices being reduced than before.

snowqueen555

p.s My main worry is after the fixed period something happens like a kebab shop opens and then I cannot remortgage and get stuck on the variable rate.

canaldumidi

Many lenders will refuse a mortgage for a proprty above (or next to) a retail shop, take-away or similar. But your broker will either find a suitable lender or tell you "Sorry".

But even if a lender can be found, the same issue could arise if/when you sell. Especially if lenders tighten their rules on this further in the intervening years, meaning you could be limited toselling tocash buyers only.

All that impacts on market value.

How does the price you've agreed compare with similar sized local flats that are not above a shop? 'Sold' prices.

snowqueen555

There aren't many flats on sale above shops so I did have a look but couldn't see. I think the same flat in the same area not above a shop would go for £180k right now. Every other flat I've looked at needs decoration works so I also factored that into my offer as well.

canaldumidi

snowqueen555 said:

There aren't many flats on sale above shops so I did have a look but couldn't see. I think the same flat in the same area not above a shop would go for £180k right now. Every other flat I've looked at needs decoration works so I also factored that into my offer as well.

Any actual 'sold' prices? They are much more relevant than seller's advertised prices.

Difference between your £173 and an advertised price of £180 is marginal, but the £180 flat (which might actually sell for less) doesnot have the current or future mortgage problem so should be much more attractive.

Decoration makes little difference.

snowqueen555

canaldumidi said:

snowqueen555 said:

There aren't many flats on sale above shops so I did have a look but couldn't see. I think the same flat in the same area not above a shop would go for £180k right now. Every other flat I've looked at needs decoration works so I also factored that into my offer as well.

Any actual 'sold' prices? They are much more relevant than seller's advertised prices.

Difference between your £173 and an advertised price of £180 is marginal, but the £180 flat (which might actually sell for less) doesnot have the current or future mortgage problem so should be much more attractive.

Decoration makes little difference.

Yeah I was sorta thinking that. I think I'll have to see what the valuation says and I might pay to get a second opinion.

I'm sorta hoping it is for less now so I can negotiate it down.

SavingPennies_2

snowqueen555 said:

I've had an offer accepted on a flat in Bristol, main concern is it is above shops. Let me preface this by saying this a big compromise, I have bid on several properties before this that had central heating, driveway, their own front door, garden (all the benefits I should be looking at), but each time I have been outbid.

I am aware of the risks associated with buying above properties, I'm sorta wondering if I've overpaid or made a big mistake. I do like the area, it is 30m walk into the city centre. It was reduced from £185K  and I got it for £173k.

https://imgur.com/a/mPwT2gn

EPC D - poor heating, but very good wall and roof insulation.
45sq m
£65 pm service charges, no ground rent, 999 yr lease
Electric heating.
No parking.
Shared enclosed courtyard.
Top floor 
On the high street
Good cosmetic condition, no decorating required.

Thanks

I don't know Bristol first of all, but I have to say I don't drive and I really like walking, but anywhere over 15-20 mins becomes a real pain to walk on a regular basis, especially in winter. Also think about resale, you might not mind that there's no parking or its above a shop but others will. I personally think it looks expensive for what it is. I wouldn't be put off a more desirable property that needs decorating, whoever did it that one will likely have done a cheap job and you could do your own decorating over time/ on  budget - it's easy to change decor, location and lack of parking cannot be changed.

MaryNB

SavingPennies_2 said:

snowqueen555 said:

I've had an offer accepted on a flat in Bristol, main concern is it is above shops. Let me preface this by saying this a big compromise, I have bid on several properties before this that had central heating, driveway, their own front door, garden (all the benefits I should be looking at), but each time I have been outbid.

I am aware of the risks associated with buying above properties, I'm sorta wondering if I've overpaid or made a big mistake. I do like the area, it is 30m walk into the city centre. It was reduced from £185K  and I got it for £173k.

https://imgur.com/a/mPwT2gn

EPC D - poor heating, but very good wall and roof insulation.
45sq m
£65 pm service charges, no ground rent, 999 yr lease
Electric heating.
No parking.
Shared enclosed courtyard.
Top floor 
On the high street
Good cosmetic condition, no decorating required.

Thanks

I don't know Bristol first of all, but I have to say I don't drive and I really like walking, but anywhere over 15-20 mins becomes a real pain to walk on a regular basis, especially in winter. Also think about resale, you might not mind that there's no parking or its above a shop but others will. I personally think it looks expensive for what it is. I wouldn't be put off a more desirable property that needs decorating, whoever did it that one will likely have done a cheap job and you could do your own decorating over time/ on  budget - it's easy to change decor, location and lack of parking cannot be changed.

Each to their own I guess. I live in Bristol and it's a 40 min walk to the centre where I work. I walk in and back 5 days a week and it never bothers me. Given how unreliable Bristol buses are (and the £80 monthly ticket) and how hard it is to park in the centre I would definitely consider being a 30 min walk from the centre a huge plus. With the clean air zone coming in later this year and all the new bus gates it's getting harder to drive into the centre. Where OP is looking has plenty of buses to town so if the weather is awful there is a back up option. 

However being above a shop would be a deal-breaker for me. Wouldn't want the stress of limited mortgage options when buying and finding a buyer in the future.

K_S

snowqueen555 said:

p.s My main worry is after the fixed period something happens like a kebab shop opens and then I cannot remortgage and get stuck on the variable rate.

@snowqueen555 This is very unlikely to happen if you're with a mainstream lender. As long as you are not in arrears, etc., aren't looking to borrow more and aren't looking to change the term, you should have the option to do a product-transfer/product-switch/rate-switch with your existing lender and sign-up to a new fixed term.

This process usually involves no credit-checks, no income checks, no new property criteria. For example, even for those of my clients with un-mortgageable and unsellable flats stuck in cladding hell, I had no issues doing product transfers with their existing mainstream lender.