Buying a highrise council flat in city centre

As a general LA flats are a no-no to buy.

LA's are not seen as the best freeholders for giving value for money and on here are stories of woe from ex LA flat owner occupiers being landed with bills for tens of thousands of pound reair/renovation bills.

If the block has lifts, repair and replacement for them is eye wateringly expensive, and they are high maintenance.

Oh gosh, I wouldn't touch it for several reasons

1) You are likely going to need to stay there for the next five years. This is five years of your childrens childhoods that you are staying in a towerblock. By the time you move to a house with a garden, they won't be of 'playing in the garden age' for much longer. They need space now

2) What Rosieandjim posted above. It is not a standalone property, the service charges can be ridiculous

3) your hard work pays off Plus it releases the flat back into the local authority for a more needy family - everyones a winner

muhandis wrote: »

...with a £100/month service charge

And if the lifts need replacing, or they decide to re-do all the windows, or the roof? Bill for possibly tens of thousands will turn up.

muhandis wrote: »

Sure, there's a risk of that happening. It's all about whether you think the potential return is proportionate to the risks associated with buying a high-rise ex-council flat.

I do, but you (or the OP) may not.

Well, the OP may be satisfied that the cladding meets (current) requirements, but those may change - and I suspect there'll be other fire safety requirements arising out of Grenfell, whether compulsory or strongly recommended by insurers etc. Upgrading alarm systems, retrofitting sprinklers, etc could all be high potential costs. Plus whatever the effect has been on the market, even on blocks which are arguably safe.

And like I said, this all assumes that they can even get the funding in the first place.

Samfre wrote: »

That is my main worry and possibly some unexpected maintenance charges but it has recently been upgraded and the cladding is safe from fire point of view.
Another worry is whether potential renal income will be counted for the future mortgage application.

So if you're selling it on after the 5 years then there are only a couple of lenders who will consider the ex-authority high rise over a certain floor level. You can't rent it out for the first five years so you will need to stay there while saving a deposit for a house. If you sell between 5 and 10 years most councils expect you to offer it back to them for first refusal so you'd need to check on this clause too.

Once you decide to buy a new place if you want to keep the flat and rent it out then some lenders would take rental profits into account as self-employment income, but you would need at least a year's self-assessment done. So unless you moved out of the flat and rented somewhere for a year - which makes no sense because that will cost more than just living in your place - then no, you can't use the rental income to get a bigger mortgage on a new house.

If you buy your flat cash, and then in 5 years time decide to rent it out while living elsewhere you will have to pay 20% tax (if you're a basic rate taxpayer) on the rental income, minus a few allowances such as letting agent fees, service charges etc. So your profit is down to about £350/mth which would only cover some of the cost of renting elsewhere.

Plus you'll have an additional 3% stamp duty to pay on your new home if you keep the flat to rent out. If you buy a house at £150k for example then you'll have to pay £5,000 stamp duty instead of £0 if you don't buy the flat and just buy a house when you have the savings. That's over a year of rental profits gone.

Plus what everyone else said about building repairs esp if it's only 10% owner occupied. You basically have zero say in what happens if the council is majority owner.