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  • Buy-to-Let

    10 reasons to buy a house rather than a flat .... EVERY time.

    A fascinating thread with good points, but after 30 years experience I tend towards Vanessa's view.  I will not buy any flats myself (unless I can own an entire block).  Part of my experience was block management - something I am happy not to be involved with.

    A well set up block can work well, but I have found that landlords are first to stop paying service charges.  Many link their rental income with need (or ability) to pay service charges.  If rent is light, or the they incur repairs, it's the service charge that is not paid.  Even over occupiers can baulk sometimes with many failing to grasp how much works cost in the real world.  Try roofing a block of flats in a H and S compliant way and see what it costs! Unfortunately the leaseholders are paying costs out of taxed income and that is the hard bit for them; at least a landlord can offset costs against tax.

    I dis-instructed my firm on a number of occasions.  One was a block that was heavily let and landlords were largely absent; they would not meet, would not look at their properties and would not agree to spend any money (however desperate).  Their tenants then moaned at me and my staff for not keeping the building in good order.  Another one had a poorly drafted lease with some owners paying a significant proportion towards "common parts" that were not common to them and from which they had no benefit at all.  Understandably they would not agree to any expenditure, leaving some unhappy leaseholders.  The reality is that those buying with the extra liability should have either not been buying or should have made a sizeable discount.

    I have also seen recent builds which are not fully sold and where there is little will to get works done.  The developer has to pay for the unsold flats but would rather not; those in place then incur a higher expenditure.

    Finally, small blocks are a nightmare due to disproportionate costs.  There is still a requirement for accountancy, bookkeeping costs, management inspections, H and S reports, etc..  It is more palatable if these costs can be spread over more flats.

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    Excellent summary, here on the east Kent coast (as with many other coastal towns) there are huge numbers of larger houses that became bandb’s in the 50’/60’s , then into converted flats. They were generally cheap and poorly done, appealed to landlords wanting good returns renting to the “dole on sea” crowd. 

    These properties now blight many areas, poorly maintained and ignoring most of the legislation, these are generally in the firing line when selective licencing schemes are adopted, but currently there is little councils do in regard to common areas and exteriors, when this comes to the fore (probably when fire safety is updated after Grenfell) flats in such buildings are going to become pretty much worthless in comparison to freehold property, unless you can get an unbroken block.
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    I think freehold vs leasehold stems from perception that with the latter you're at the mercy of managing agent, the freeholder, the flat above your flat (if ground floor), every flat above your flat.(if multi-storey) etc.. I think that loss of control and added expense does bite. If I could buy a house, I would go that route.

    As far as service charges I will admit that when I bought my leasehold flat it was rented out within a week, I knew nothing about what that entailed having always lived in a house. No letters were ever forwarded to me regarding service charges so in the first 2 years I didn't pay anything. It's only once they sent it to my home that I realised I had SC to pay and from that day I've kept on top of it. But also that chapter was the beginning of my quest to educate myself to understand the property market better and laws. I think leasehold is still archaic and should be abolished for something better.

    I think where the flats outdo houses is on energy efficiency. So they should since they have been built in the last decade. To get houses up to this level would require massive capital investment that owner occupiers will leave until they absolutely have to. Where flats - maybe it's changed in the last 12 months - have let themselves down is letting developers make them so small as to need external storage space. Which is an added cost.

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