Selling to Local Council and the financials

last_mile

Has anyone sold their property to the council?
If so what was your experience?

My local council has re-opened their "Buy back" scheme for ex-council properties which help them achieve certain goals.
One of these goals is to complete ownership of a building like mine, it contains 7 flats and I am the only owner / non-council resident.

After years of issues both Building and Residents, i have decided it is time to move and this scheme is my exit plan.

I am worried mainly around the financial element, as the process requires I get a home report.
This Home Report will give them a value on my property, but I am worried that the condition of the building they should be maintaining will reduce this value.

Appreciate any information or even advice anyone can give.

TIA

user1977

I'm not sure what your worry is? The council will of course be familiar with the condition of the building and the likely value of your flat. The market value is what it is.

last_mile

user1977 said:

I'm not sure what your worry is? The council will of course be familiar with the condition of the building and the likely value of your flat. The market value is what it is.

The worry being that the flat will be worth less than previous, even though i have done upgrades because the building is falling into disrepair as they wont do the work.

i.e. I had it valued in 2017 and the report said £70k but the building was better maintained.
i would like to think that in the last 7 years that value would have crept up to say £75k as it now should include things like a new boiler, updated bathrooms and kitchen.
But all of this and more could be wiped out by the holes in the close roof or the bit of missing soffit, both of which the council aren't bothering to fix even after multiple reporting's.

Herzlos

The value is going to be the value anyway, whether you were to sell to the council or privately. The council may even pay more since it'll get them complete ownership of the block.

All you can do is get a value and decide what you want to do with it.

user1977

last_mile said:

user1977 said:

I'm not sure what your worry is? The council will of course be familiar with the condition of the building and the likely value of your flat. The market value is what it is.

The worry being that the flat will be worth less than previous, even though i have done upgrades because the building is falling into disrepair as they wont do the work.

i.e. I had it valued in 2017 and the report said £70k but the building was better maintained.
i would like to think that in the last 7 years that value would have crept up to say £75k as it now should include things like a new boiler, updated bathrooms and kitchen.
But all of this and more could be wiped out by the holes in the close roof or the bit of missing soffit, both of which the council aren't bothering to fix even after multiple reporting's.

Ok, but why is that a worry? Don't you just want rid of it, at whatever its market value currently is?

Section62

last_mile said:

My local council has re-opened their "Buy back" scheme for ex-council properties which help them achieve certain goals.
One of these goals is to complete ownership of a building like mine, it contains 7 flats and I am the only owner / non-council resident.

If the council is enthusiastic about buying back properties then I don't think they will be too fussy about the condition of other parts of the building.  That doesn't mean you can name your price, as they have a legal duty to protect public funds and not pay more than is necessary.  But you are probably in a marginally better position than you would be if the council was ambivalent about having full ownership of the block.

I don't know the law in Scotland, but I'd guess the Home Report is simply needed to comply with the law and tick a box?

user1977

Section62 said:

last_mile said:

My local council has re-opened their "Buy back" scheme for ex-council properties which help them achieve certain goals.
One of these goals is to complete ownership of a building like mine, it contains 7 flats and I am the only owner / non-council resident.

I don't know the law in Scotland, but I'd guess the Home Report is simply needed to comply with the law and tick a box?

It's not legally necessary for an off-market sale like this, I would guess the council may have it as a requirement for this scheme though.

last_mile

I'm not trying to name my price, I am simply trying to protect my money.
The home report states the condition of the property under many criteria and gives a value on the market.
The council will not pay more than the home report value, which I agree with as its public funds etc.
But the report takes into consideration the building as a whole and not just my part of it.
So with parts of the building in need of repair, those parts i am not even responsible for, the valuation could be lower than if they were just considering my flat. 

A home report in Scotland contains a table that looks like the below:
Structure    score 
Main walls     1
Windows, external doors and joinery 2
External decorations 3

a 1 is all good no action
a 2 is may need repaired/ replaced but not urgently
a 3 is needs immediate attention

These all go towards what the property is worth alongside sold prices in the area.
Hence my worry because they may get my flat cheaper because they haven't maintained the building.

Its like living next door to an overgrown / uncared for house, its going to impact your houses value.

Yes i want to sell it and go but I also need to be able to go somewhere and in this economy that means I need to get a fair value for my property.

Section62

user1977 said:

Section62 said:

last_mile said:

My local council has re-opened their "Buy back" scheme for ex-council properties which help them achieve certain goals.
One of these goals is to complete ownership of a building like mine, it contains 7 flats and I am the only owner / non-council resident.

I don't know the law in Scotland, but I'd guess the Home Report is simply needed to comply with the law and tick a box?

It's not legally necessary for an off-market sale like this, I would guess the council may have it as a requirement for this scheme though.

Thanks.  Interesting, as councils usually have in-house surveyors, and would normally do a comprehensive refurbishment before letting the flat out. But having an independent assessment and valuation may help them justify the use of public funds I suppose.

user1977

Ok, but a fair value is whatever it's actually currently worth, i.e. what anybody else would pay for it if you put it on the market - so that will take account of potential common liabilities (for things which your flat would have to contribute to), and what the neighbourhood is like. As Section62 says there might be a slight premium which the council will pay in order to get control of the whole building. And you save the costs/hassle involved in selling yourself.

But if you don't even know what the valuation is yet, what's the point in worrying about it?

Yorkie1

When is the point of no return? Can you still make an informed decision either way once the home report and the council's offer / valuation are known? If so, have you got anything to lose by taking the first steps along the journey at this point?