Apartment with lift or shared ownership house - help me decide

AppealCD1

I’m newly separated, mortgage paid off as of this month and just sold the family home with value to be split 50/50. Have 11 yrs Til stat retirement, though would ideally prefer to retire earlier or reduce hours.

Option 1: 
2 bed Apartment in a development sited on former MOD site. Were New build and conversions of MOD buildings to apartments around 15yrs ago. Apartment2nd floor in block of 26 flats over 3 floors with lift. Service charge £2600 pa. Parking permit.

I can comfortably afford mortgage over 10 years and to keep some cash back to replace savings which were spent mainly on divorce. 

Option 2: 
New build 2 bed detached shared ownership house on small plot. I could afford a 70% share for roughly the cost of the apartment. Rent on remainder would be around £320 per month. Allocated parking demised. 

I’m really not fussed about a garden but do like the idea of a shed to store picnic chairs etc. 

what are the pros/cons of rent vs service charges?  Both would be long leases. Would one be easier for my family to dispose of after my death? 

Myci85

I'd check if the shared ownership also has service charges/ ground rent as they often do on these new build estates. 

eddddy

As above, the shared ownership house will be leasehold, and there will almost certainly be a service charge.

Plus you will probably be responsible for 100% of the cost of insuring, maintaining and repairing the house....

• if the roof of the house starts leaking, you will probably have to find a roofer yourself, and pay the full bill.

• if the roof of the flats starts leaking, the management company will find a roofer, and you will only pay a percentage of the bill. (But the total bill might be much bigger.)

But...

• the house is new so should need little maintenance and repairs for the next few years, and it might have a builder's warranty that covers repairs for a year or two - so repair costs might be low.

• the flats are 15 years old, so are likely to need more maintenance and repairs. (Google suggests that residential lifts have a lifespan of 15 to 25 years - so there might be a huge bill for lift refurbishment/replacement soon. Is there a sink fund for that?)

But...

Typically, you pay a premium price for newbuilds... so you might get a better 'return on investment' / 'increase in value' with the flat compared to the house, when you eventually sell.


Edit to add...

You suggest that you might stay in the property until you die. I've come across a lot of people who suffer with mobility problems in later life - and find stairs very difficult. So a flat on one level, accessed by a lift, might be better than a house with stairs.

RAS

Lifts cost a lot when they go wrong.

AppealCD1

There is just an admin fee on the house of around £20 per month. Good point about the lifts though. 

AppealCD1

Can I find anything out at this stage (offer accepted on apartment) or does it need to be done via solicitor?

RAS

You can get a copy of the lease from the Land Registry, which will specify any covenants. So if you might want a cat, a lease prohibiting them......, and find out whether maintenance and repair costs are divided equally between flats, or based on square footage, etc.

eddddy

AppealCD1 said:

Can I find anything out at this stage (offer accepted on apartment) or does it need to be done via solicitor?

You can ask the seller any questions you like. They might or might not give helpful answers.

But you can't rely on their answers (legally), you can only rely on answers that come via solicitors. So if an answer is important to you, get it confirmed via solicitors.

So for example, if the seller says the lift was refurbished 2 years ago, tell your solicitor to ask for confirmation that the lift was refurbished 2 years ago.

But it's probably still worth asking the seller questions - you might get feedback much more quickly than waiting for solicitors.


In an ideal world, you might also want to ask the management company some questions - but it's unlikely that they will talk to you. But you could try asking the seller to ask the management company questions. (But again, get confirmation via your solicitor, if the answers are important to you.)

eddddy

RAS said:

You can get a copy of the lease from the Land Registry, which will specify any covenants. So if you might want a cat, a lease prohibiting them......, and find out whether maintenance and repair costs are divided equally between flats, or based on square footage, etc.

You'd have to do that by post (using a form called OC2) so it might take a week or so.

Your solicitor probably has access to the Land Registry portal (because they are property professionals) - so they might be able to get it instantly.  But your solicitor might not 'drop everything' to get you a copy, so there might still be a delay, and they might charge you for their time.


There are also some companies who are registered as property professionals with Land Registry - they advertise on the internet, and can often get copies of leases instantly (but some look a bit dodgy). But they tend to charge a hefty premium.


Alternatively, the seller might have a copy of the lease.

Murphybear

eddddy said:

As above, the shared ownership house will be leasehold, and there will almost certainly be a service charge.

Plus you will probably be responsible for 100% of the cost of insuring, maintaining and repairing the house....

• if the roof of the house starts leaking, you will probably have to find a roofer yourself, and pay the full bill.

• if the roof of the flats starts leaking, the management company will find a roofer, and you will only pay a percentage of the bill. (But the total bill might be much bigger.)

But...

• the house is new so should need little maintenance and repairs for the next few years, and it might have a builder's warranty that covers repairs for a year or two - so repair costs might be low.

• the flats are 15 years old, so are likely to need more maintenance and repairs. (Google suggests that residential lifts have a lifespan of 15 to 25 years - so there might be a huge bill for lift refurbishment/replacement soon. Is there a sink fund for that?)

But...

Typically, you pay a premium price for newbuilds... so you might get a better 'return on investment' / 'increase in value' with the flat compared to the house, when you eventually sell.


Edit to add...

You suggest that you might stay in the property until you die. I've come across a lot of people who suffer with mobility problems in later life - and find stairs very difficult. So a flat on one level, accessed by a lift, might be better than a house with stairs.

Not necessarily.  I live in a development of 1 bedroomed flats over 2 stories.  It was built for the British Legion in 1987 and our Housing Association bought it .  The lift is the original.  It is regularly serviced and rarely goes wrong.  

Tabieth

Neither really appeal to me, I wouldn’t buy either. I looked at shared ownership when I first bought in London and I’m very glad I didn’t go down that route. And when I bought this time around I was looking at leasehold flats or houses, I’m very glad I bought a freehold house. My advice FWIW would be to but freehold and outright (not shared ownership) if you possibly can.