PRC Home - Should I buy?

FTB_Leeds

Hi all,

I am looking at buying my first home. My dad is looking to sell his property so naturally it would have been ideal for me to buy it. Upon getting a mortgage offer and the property being inspected it came back as PRC (Prefabricated reinforced concrete) property. Subsequently the mortgage was pulled, I am currently waiting to hear back from Skipton BS as they do still mortgage these properties.

A bit of background:-

I am a single 30 years old living in Leeds with a 30k deposit.

The property was repaired (privately due my dad owning the home) and issued a PRC certificate in 2008. The adjourning property (and the other two terraced houses) has also been repaired but was done by the council and doesn't seem to have been repaired to the same standard.

The house is an end of terrace house and my dad wants £100,000 for the property. My dad is one end of a terrace of 4 houses, the other end terrace was sold in Nov 23 for £116,000 at auction (I assume because the property wasn't mortgageable and they need a cash buyer)

If my mortgage is accepted (£80,000 over 20 years with me putting down £20,000), I will likely carry out a level 3 RICS on the property for peace of mind. 

My question is two fold really:-

1) Would you recommend going through with the purchase? Everything about the house is a pro, from location to interior etc, with the only con being the fact it could be potentially unmortgageable in the future. (The house next door is still owned by the council and the tenants are struggling to find a mortgage)

2) If I do purchase the home, do you think the house will hold value / appreciate over time? I will likely only be able to sell to cash buyers in the future, but with a similar house (with lesser repairs) going for £116,000 just 10 months ago at auction. My concern is that with it being a former PRC home that it will actually depreciate over time as the life of the house gets older.

Note: With the mortgage being so small, I would be able to pay the mortgage and afford to put £300-£500 a side a month after all other bills, subscriptions and £300 put a side for "social". To potentially fund a deposit for a future house in 10 years, allowing me to either rent out this property or sell to a cash buyer.

I should really wait until I hear back from Skipton to post this, but I am equal parts excited and anxious.

Brie

It seems like a good solution for your dad certainly.  Assuming you are giving him the market price.  If not and should he need care support in the future there may be questions about it being sold under value and so deprivation of assets.  

Mortgage concerns and dad aside are there other properties you would consider?

Resale is always a consideration of course but anything can happen to any property - a new supermarket nearby or a new school.  Or someone in the building industry might realise that PRC isn't so bad for some reason.  

FlorayG

You never can tell with resale, it all depends on who is looking at the time. A friend of mine recently bought one of these - she had cash after sale of mortgaged property so not a huge amount, she's not planning to move out again until she's in a pine box, it's in good condition, has housing association tenants both sides. She's very happy with it; so making your purchase on resale possibilities is a minor consideration IMO

FTB_Leeds

The house is actually right next to a primary school. Before the issue of PRC was found, estate agents valued the property at £162,500 - £175,000 (I was initially buying the property for £140,000)

I spoke to my financial advisor regarding the deprivation of assets and he didn't foresee it being a problem. My dads estate doesn't fall within inheritance tax and with regards to care, there was no conscious effort to defraud the care home as my dad doesn't need care and doesn't foresee himself needing it, obviously anything can change in the future)

The last part it what I really need a crystal ball for. The building/mortgage industry may go one of two ways, they may complete blacklist them in future, or they could go back on there decision and come to realise that at a discount they offer good value for money.

FTB_Leeds

Brie said:

It seems like a good solution for your dad certainly.  Assuming you are giving him the market price.  If not and should he need care support in the future there may be questions about it being sold under value and so deprivation of assets.  

Mortgage concerns and dad aside are there other properties you would consider?

Resale is always a consideration of course but anything can happen to any property - a new supermarket nearby or a new school.  Or someone in the building industry might realise that PRC isn't so bad for some reason.  

Also a follow up, there are other properties I would consider. There is 2 bed 2 bath flat available for £140,000. In terms of houses, not at the moment but I am no rush to move if I can't find the right property. 

FTB_Leeds

My main area of concern ultimately will concrete houses appreciate like normal property, hold there value or depreciate as the life of the house increases.