Flat vs House costs

Miri_J

Hi, I'm downsizing and having a bit of a debate with someone (and myself) as to whether I'd be best buying a flat or a house.
I've retired due to ill health so I'm on a fixed income, no chance of increasing my total pot in future.
I have enough capital to buy a small 2-3 bed house, but maybe not enough income to maintain it. 
I'm aware that in flats you have to pay ground rent / service charges and some into a sinking fund too.
Realistically, are people able to give me any comparisons here? Probably not the nightmare scenarios and not the luxury flats with pools & porters on hand (I'm not over retirement age). But normal situations, what does it really cost to own a flat and similarly how much does it cost to maintain a smallish house in good condition? (Am I allowed to ask this?) This is outside London & the South East. I wouldn't be going for an older house either, I did get a survey done on a 70's house & pulled out because there were too many major items needing doing on it.
Thanks for your help.

MikeJXE

I would definitely not consider a leasehold anything 

I'm retired too (83) and sold my house (150,000) 5 years ago, at the time I wasn't sure whether to buy or rent or even where 

 The house maintenance didn't cost much but the garden needed more care than I was able to give

I did the maths and decided to rent for awhile, I'm in my 4th flat now by choice and mainly the reason being location

This is it for me as it's perfect. 1 bed ground floor well insulated and easy walking distance to the town and park 

 I gave half my funds to the kids and grandkids as I don't actually need it 

 No stress no unforeseen expenses, obviously if the landlady wanted me out I would have to go but then I will find somewhere else, it doesn't worry me. 

The money in the bank is good while the higher interests last 

Robin9

Covid has shown that Open Space as in a garden is a benefit but that can come at a cost. Is over 55 accommodation in it's own grounds an option? Ground rent/Service Charges can be a drawback but we sat down and worked out what we pay for a gardener, lawn mowing, window cleaner, minor repairs ...........     

DullGreyGuy

The advantage of a house that your the freeholder of is that its ultimately your choice if you do maintenance or not. You could defer work for a few months to save up for it etc.

As a leaseholder of a flat that choice is taken away from you, we had a Section 20 notice about a leaking flat roof over one of our neighbours and now have another S20 for a Cavity Tray installation for a different leak with a different neighbour. Ok this process takes a bit of time but we'll have to pay the bill on demand when it comes. In a house you wouldn't be paying for your neighbours problems but then they also pay for yours. The real pain is the management fee they try to add onto the actual repair costs... have to dispute each time as it's 1/3 of the bill.

I'd be wary of retirement homes/over 55 living... so many horror stories of very high charges and properties being unsellable.  

lika_86

Our ongoing maintenance on our two bedroom London house with walled courtyard has been minimal over the past three years. Obviously at some point something will need repairing but that'd be the same with a flat. As long as the roof, windows, doors, boiler etc are pretty sound when you buy then maintenance will be minimal and in your control.

Miri_J

Robin9 said:

Covid has shown that Open Space as in a garden is a benefit but that can come at a cost. Is over 55 accommodation in it's own grounds an option? Ground rent/Service Charges can be a drawback but we sat down and worked out what we pay for a gardener, lawn mowing, window cleaner, minor repairs ...........     

Sure, garden is a big concern for me. I don't quite qualify for over 55 yet. I've never been in charge of the budgeting before so I'm not quite sure what repairs are likely to cost, which is why I'm turning to others for their wisdom!

NameUnavailable

As you know a flat will have fixed/variable annual costs, service charge, additional 'major' works and possibly ground rent.

The advantage, especially for someone with health issues, is that you probably don't need to do anything yourself, all maintenance on the building and communal grounds will be taken care of by the management company and your living space is all on one floor (maybe get a ground floor flat?).

Obviously with a house there is still maintenance but you decide what and when, so you can do things as you can afford them or DIY.

If going for a flat my advice is to look for one that is shared freehold, a long 900+ year lease and peppercorn ground rent.

If you go for a house then look for something that's been updated or is newish, so no issues with things like the roof, windows, heating or damp, and ideally one that's not been painted outside (which is an expense to refresh every 5 years).

AlexMac

The advice above is good; but as regards your questions about cost comparisons;

we’ve owned three leasehold flats over the years, plus two ex- council buy to let flats where the Coucil are freeholders. All but one were 2-bedrooms

Service charges (including building’s insurance) are/were in the range £900 - £1,400 per annum but every 8-10 years or so there has been a bigger one off bill for communal repairs, external decoration, windows replacement, roof replacement or repair. These have ranged from a couple of grand to £5k. 

With the exception of the two BtLs, they’ve all been ‘shared freeholds” in converted period blocks which we self manged, thus keeping costs well down (no dodgy management agents or absent freeholders in it for the money). 

So a well-chosen flat might be OK (notwithstanding my preference for smaller self/managed shared freehold blocks)  but I’m pleased we’re now in a low-maintenance freehold house as it gives us total control;  buy one like ours with no damp and a decent roof if you go down that route. 

We’ve spent less, annualised, on our house’s repairs over the past 12 years than we’ve averaged on most of the flats; just two external paint jobs on woodwork at £1-2k, plus a new boiler and discretionary improvements, which would be down to you, even in a flat

Miri_J

AlexMac said:

The advice above is good; but as regards your questions about cost comparisons;

we’ve owned three leasehold flats over the years, plus two ex- council buy to let flats where the Coucil are freeholders. All but one were 2-bedrooms

Service charges (including building’s insurance) are/were in the range £900 - £1,400 per annum but every 8-10 years or so there has been a bigger one off bill for communal repairs, external decoration, windows replacement, roof replacement or repair. These have ranged from a couple of grand to £5k. 

With the exception of the two BtLs, they’ve all been ‘shared freeholds” in converted period blocks which we self manged, thus keeping costs well down (no dodgy management agents or absent freeholders in it for the money). 

So a well-chosen flat might be OK (notwithstanding my preference for smaller self/managed shared freehold blocks)  but I’m pleased we’re now in a low-maintenance freehold house as it gives us total control;  buy one like ours with no damp and a decent roof if you go down that route. 

We’ve spent less, annualised, on our house’s repairs over the past 12 years than we’ve averaged on most of the flats; just two external paint jobs on woodwork at £1-2k, plus a new boiler and discretionary improvements, which would be down to you, even in a flat

Thank you, that's really useful information Alex. Are you actually saying that, on top of the £900 - £1,400 per annum, you personally were presented with bills for 2-5k every 8-10 years? That seems like a lot. It seems like a similar amount to what I'd expect to spend on external maintenance if I bought a fairly new house!

I wonder whether anyone else is able to give me similar information to compare?

km1500

if you buy a flat you should definitely budget for your ground rent and the service charge of whatever but typically 1500 to 2000 a year

on top of this you could be lucky and never get any big bills, you could be hit with a medium bill of a few thousand for something unexpected or you could be hit with a huge bill for a roof replacement - you have no idea it is a bit of a lottery.

if it's for me I would be looking for a small two bed house with a little garden preferably the garden facing South or West

Albermarle

I have enough capital to buy a small 2-3 bed house, but maybe not enough income to maintain it. 

I think there is more demand for 3 bed houses than 2 bed,  and prices take a jump up, even if the houses are similar sizes. So if you do not need 3 beds, then maybe best not consider that.

I'd be wary of retirement homes/over 55 living... so many horror stories of very high charges and properties being unsellable.  

If you just look at 2 bed retirement individual properties on a small estate ( without any communal services etc ) Then they can be cheap as there is a glut of them. Of course they would probably not be a great investment but if the OP intends to stay there a long time it might not matter so much. I do not think that the OP being less than 55 ( and also in poor health) would be a big barrier if it meant someone could get a sale.