Value and capital growth

ConfusedFirstBuyer2

Hi,

Me and my partner are intending to buy an ex-council flat in Brentwood for £55k cash offer; it's within a mile of Brentwood station. The area surrounding the flat is currently over 50% council housing (though new developments are being built there) and the building is old (possibly 1960s). Any expert advice on whether or not this property will achieve capital growth over time would be much appreciated.

JM68

Seems very cheap for that area.  Do you know how long is left on the lease?  Is it structurally sound?  Was it marketed as 'cash buyers only' (they do that for a reason)?

lincroft1710

The BIG problem with buying an ex-council flat is when the council decide that the building needs repairs//renovation/upgrading. Then you can be faced with a five figure bill and given very little time in which to pay

badmemory

If you are living in it the value & value increase/decrease is irrelevant once it is paid for.  It is the roof over your head.  But flats incur charges of their own & as lincroft says that can be significant.  Personally I wouldn't get involved in buying a flat but then I live in the north west & buying a house is more possible. 

Why not save hard & then move north & buy then.  Yes I am biased because when I lived near London frankly I didn't like it much & the pleasure in moving from what was then a large mortgage to a pretty small one was a double win in my eyes.

Sarah1Mitty2

badmemory said:

If you are living in it the value & value increase/decrease is irrelevant once it is paid for.  It is the roof over your head.  But flats incur charges of their own & as lincroft says that can be significant.  Personally I wouldn't get involved in buying a flat but then I live in the north west & buying a house is more possible. 

Why not save hard & then move north & buy then.  Yes I am biased because when I lived near London frankly I didn't like it much & the pleasure in moving from what was then a large mortgage to a pretty small one was a double win in my eyes.

They are paying 55k cash for the house, they won`t have any mortgage.

martindow

Is this an auction guide price?  It appears to be extraordinarily cheap.  If it seems too good to be true ...

sourpuss2021

Is it a retirement flat?

I can’t see anything else under £100k in that area…

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E207&maxPrice=100000&sortType=1&propertyTypes=&includeSSTC=true&mustHave=&dontShow=&furnishTypes=&keywords=

ConfusedFirstBuyer2

It was listed at a significantly higher price, however despite both me and my partner having an excellent credit history and getting only a small mortgage (around £55k)

Seems very cheap for that area.  Do you know how long is left on the lease?  Is it structurally sound?  Was it marketed as 'cash buyers only' (they do that for a reason)?

It was listed at a significantly higher price, however despite both me and my partner having an excellent credit history and applying for a mortgage of around £55k, about 29 out of 30 mortgage lenders rejected giving a mortgage on it, hence the cash offer. It was not advertised as cash buyers only, and from viewing the flat it looks structurally sound but no survey has been done on it yet

mi-key

Do you know why they wouldn't give a mortgage on it? Normally this is because of some problem with the flat itself

mi-key

And have you actually had your £55K cash offer accepted by the seller yet ? 

ConfusedFirstBuyer2

mi-key said:

Do you know why they wouldn't give a mortgage on it? Normally this is because of some problem with the flat itself

As far as we know, the main concern of the mortgage lenders were that they wouldn't be able to sell the flat for £56,000 if we were to default on the loan; this is due to a combination of over 50% of surrounding housing being council housing and due to the building being old and having deck access. It doesn't seem to be to do with structural issues from our understanding