Buying council flat above commercial properties to live in

yungturl

Hello MSE Gurus

I am new to the forum so apologies if this has been covered elsewhere (I'm sure it has in detail, however I cheekily wanted specific advise in my case)...

Myself and partner are looking to buy a 3bed flat in Teignmouth Close SW4 London, great location, but is a leasehold from council (we think) and is above an Indian restaurant and dry cleaners (2nd floor, so one other flat in-between). We're able to offer cash (after an untimely inheritance) and so mortgage is not an issue

We're looking to live here long-term and don't foresee ourselves being forced sellers at any point, nor do we particularly care about the commercial units ourselves (I love the smell of Indian food, and I have yet to understand what is particularly bad about dry cleaners)

We've offered £363k which we think is fair given location, but discounted for above points - (we think it's a bit of a steal actually and so concerned if we've missed something)

What do you think? Good idea? Any major pitfalls we should look out for?

We're going to talk to the council about making sure no major works on the building are planned/understanding how many other leaseholders there are in case costs need to be shared, and we'll do a few tours of the area on a Friday/Saturday night to understand how busy it gets

Thank you very much in advance for your comments
[I wanted to post a link but system told me I am too new ...]

user1977

You just need to make the link not look like a link (insert spaces or similar)

theartfullodger

Spend £6 with gov.uk land registry and get leasehold and freehold deeds and you'll know who is freeholder.

DullGreyGuy

yungturl said:
I have yet to understand what is particularly bad about dry cleaners)

Just a dry cleaners or a laundrette? 

 Assuming the later, heat... big gas fired tumble driers venting all the moisture and heat out under your windows. If it's dry cleaning on site then add the fumes from the chemicals used in the process. 

 Like restaurants both can smell, though laundrettes tend not to be a bad smell. 

 There is a slight increase in fire risk, especially if it isn't well maintained. 

 If it's a long opening hours, self service type place then they can also be attractive for anti-social behaviour as somewhere out of the cold and wet. We lived near one at uni which was unmanned between 6pm and 1am when it closed. The person that came at 1am to lock up frequently had to kick out one or more drunk who'd bedded down inside. 

Martico

Looks like this one: https://www.rightmove.co.uk/properties/141089576#/?channel=RES_BUY

kingstreet

Only thing for future is saleability. It's likely to be unmortgageable and that will drastically reduce your pool of potential buyers. It may not be foreseeable, but you can't afford to ignore the possibility you might need to sell.

You also need to watch out for residual lease term, ground rent escalation and size of service charges as with any flat.

yungturl

Martico said:

Looks like this one: 

Exactly that's the one, thanks Martico!

yungturl

kingstreet said:

Only thing for future is saleability. It's likely to be unmortgageable and that will drastically reduce your pool of potential buyers. It may not be foreseeable, but you can't afford to ignore the possibility you might need to sell.

You also need to watch out for residual lease term, ground rent escalation and size of service charges as with any flat.

Thanks this is very helpful. Will take Artful's advice also re. land registry and consider DGG's points also (we're going to have a closer inspection of the area this evening...)

hazyjo

Councils can be a nightmare for high bills (not necessarily service charges). I'd want to knock and meet some neighbours and see what they're like and what they think of the block.

If planning a family, may not be ideal with steps.

Would want to knock loo/bathroom through. Some councils put a blanket no on knocking down walls.

I'd not want to buy a flat which is likely to be extremely hard to sell on.

Would you consider a mortgage on top? I'd much prefer to do that, but appreciate we're all different!

KiKi

I used to live above commercial premises.  Not sure how your leases are split, but where I was (5 flats, two shops), I was liable for 20% of all freehold costs, and the commercial premises were only liable for 7% each (or similar).  They didn't take the same sort of care in the shops that flat owners did, so things fell into disrepair more quickly, which meant that I ended up paying out for stuff that fell under the freehold, but had been caused by their carelessness.

Similarly, one of the shop owners just stopped paying the service charges as they couldn't afford it.  The consequences of that were that the managing agents were using solicitors to take legal advice - and charging all those solicitor fees to the leaseholders, thus increasing the charges even more.

Of course, you can have those issues with residential leaseholders, too.  But in my one experience of commercial leaseholders, they weren't as bothered as residents as they weren't living there.  However, I'm sure many people have just as many good experiences, too - it's probably down to luck!

njkmr

Bought and for sale within 2 years? Why is the question.
I'm up north and that kind of money for a flat above a restaurant and launderette.. Hell no.
Sorry but I cannot think of a worse place to put your money.
Insurance will be high and trying to sell later, no no no.