General flat questions

[Glaucus]

Has anyone done this and been through the process? if so would you do it again? Or is there to many negatives? quite worried about what will happen with houses prices due to brexit and I wasn't even looking at shared ownership, but some nice flats have come up in the right area. The cheaper 1 bed duplexes are about £620 with mortgage, rent and fees which include management, ground upkeep, building insurance and on-site gym) and go up from there, add a balcony for about an extra £50 a month. Looks like a nice development, acres of ground, fishing lakes, allotments, bbq areas etc.

just looking what peoples opinion are on shared ownership as I have been against it, but these look very nice and more importantly in a great location for me.

 

[Glaucus]

thanks, good to here. How does the mortgage work, do they have a list of vendors you have to use or what?

 

[Glaucus]

I would check the interest rates on the mortgage, I know someone who got one and the rate was pretty terrible (around 4.5% I recall)

that's pretty normal for any of the help to buy schemes. although that is likely to be a 5year fixed.

 

[Glaucus]

Thanks very much, one other thing can you haggel on price or do they stay firm on the asking.
I submitted the help to buy form so should get a yay or nay from that part by Friday.

 

[Glaucus]

One nice thing, which I think is standard, is ours came fully carpeted and finished so we didn't have anything to buy except a fridge and curtains.

yeah these come fully finished even has zoned under floor heating.

 

[Glaucus]

well i had mortgage in principle end of last year for 130k, but that means buying 15 or so miles further away, these start at 150k and the one I like the look of is 160k, although it would depend on the exact breakdown of costs I don't want to stretch myself.
and rather than being 30min drive away from friends, work etc, ill be just a few miles away from both.

 

[Glaucus]

as i'm looking at flats, no way I could afford a house now 3 years ago or longer I could have. They will all be leasehold anyway. virtually no flats are freehold.

 

[Glaucus]

well got help to buy approval, they also seem to do equity loan, not sure which would be better. So I suppose its time to book a viewing and have a chat and see what all the options are.

 

[Glaucus]

I don't think there are many of those people. People either sell up and use the profit and savings to move on to a normal mortgage, or buy out and stay there.

Assuming I went with 150k at 75% (depends on exact figures)
that would leave 37500 to buy at a latter day
assuming 11% per year rise in house prices
in 5 years that would be 63k to purchase.
So to get 10% deposit for that amount, I would need to save around £90 per month for those 5 years and get 5% interest, which at the moment I am well exceeding that with funds.

or 50% would be 127k to purchase the other 50% in 5 years and would mean saving about £180 per month. That's assuming prices continue the 11% per year rise but i don't think it will carry raising that much.

the equity loan seems to be similar but you are only left with 20% to buy out in 5 years (you can wait longer but you start paying interest n the 20%)

although two more have come on the market, although no one seems to want to return my calls( I might just go in person tomorrow), one in perfect location for 145k can walk to all my mates, and one similar area to the one I saw initially but only 130k and not built yet, which seems like you can get a better deal, not so much money off but get free upgrades to the decoration etc.

 

[Glaucus]

How much is the rent/service charge etc on the remainder?

it varies. the one I was talking about in the op the service charge is expensive seems to be 70-110 depending on which flat I assume its based on size, as it includes gym, 10 acres of land, fishing lakes, allotments etc.

the one in perfect location is (but no where near as nice)
£145k

£585.44 5 year fixed 4.69% £108,750 @ 75% or cheapest appears to be £544.75 on 2 year fixed at 3.99%
£79.87 rent
£4.55 service charge
£90 into savings account

total £759.86

compared to 130k property outright of
699.83 5year fixed 4.69%
658.03 2 year fixed 3.79%

both 5% deposit.

 

[Glaucus]

anyone know much about leasehold? there's a couple with 120years left and seem to have started with 125years. Google seem to be mixed messages and seem to suggest anything with more than 80years is fine, while others suggest you want 100s of years(which was the impression I had, but I didn't realise some came with 125years to start with). 132k 1 bed flat with private garden, in amazing location, 300 for service/ground rent, but 120years left.

 

[Glaucus]

I'm still looking, anyone with shared ownership, what is considered minor decoration and can be done without permission and what is considered more and needs written consent. Things like in wall/ceiling speakers and whole in outside wall for mechanical ventilation, any idea what these would fall under. All I can find is vague terms.

 

[Glaucus]

Saw another flat today, but this one's freehold, initially I thought this was good. But after googling it seems it may not be.but Google also has conflicting info. Someday mortgage is a no-no but others say it fine. Others say repairing shared parts Kirk roof is just pot luck and sort it between the two freehold flats, while others see contracts can be in the deeds and also insurance policies etc.

Anyone know anything about freehold flats?

 

[Glaucus]

Yes, I see a fair few of them as there are a lot of older properties in my area that have been converted back in the days when it would be acceptable.

Generally my advice would be stay away.

Can they be ok? Yes. But it's rare. After all if whoever conveyed it originally was good enough to put in all the required rights etc, they'd have done a lease

I can't be bothered to load the CML Handbook on my phone to see which of the main lenders will lend on freehold flats but it's not all of them.

The reason Google gives conflicting information is because it's a case by case decision.

thanks, probably why its cheap, is it possible to push the lease hold through whilst buying, and making it part of the offer? Although obviously, this means getting a third party to accept it. or at least some formal contract on how repairs will be dealt with, this seems to be the biggest issue?

 

[Glaucus]

Hope that makes sense?

thanks, think I'll hold off that one. Got a viewing on another one on Thursday anyway with 999year lease. Similar property just an extra 10k.
if the other one doesn't sell and I haven't found anything else maybe I'll rethink and go in with a very low offer or something.

 

[Glaucus]

next round of questions, how much can you realistically soundproof ceilings and walls, i don't mind losing a fair amount like 10cm per wall/ceiling.
One I saw today you could easily hear their music. Is it possible to block it out totally, with the algorithmic scale it's hard to estimate db but I would place it just below a normal conversation in a quiet area.

 

[Glaucus]

found a flat I like, top floor flat as well, so far fewer issues with noise insulation, it is also stripped back to floorboards cupboards has no doors etc.
and a secluded garden that i have no worries about building a large shed on and annoying neighbours.

however a few questions
there's no gas, has anyone had any experience with electric underfloor heating an how much it costs to run?

then the main one which I know I should be asking questions, but I'm not quite sure what I should be asking.
its 980year lease, no charges, freehold is owned by a person. What questions should I be asking about that, especially as it needs total redecoration and I know most leaseholds have some restriction that you need to get permision? is there other questions i should be asking about the freehold/leasehold?

how good are building surveys obviously with plasterboard up how much can they actually see, do they actually get on the roof and check the condition and do they get into the attic and check in there as well?

 

[Glaucus]

I know you've said no charges but i'll skirt over that with a general idea of questions you should be able to get answers to fairly easily (mainly by getting a copy of the lease off the agent)

Thanks, a bunch of questions sent with a few more added, wait and see what the reply is. Cross fingers as I like this one. Especially as it needs work doing, which is so hard to find these days other than at auction.

 

[Glaucus]

I know you've said no charges but i'll skirt over that with a general idea of questions you should be able to get answers to fairly easily (mainly by getting a copy of the lease off the agent)

got a reply, is there any red hearings you would be concerned about, the insurance doesn't sound right, doesn't sound like there's any provision for building insurance?

I would not be able to get a copy of the lease for you, this will be done by solicitors, when a offer is made and accepted. It is not something ourselves as estate agents will obtain.

• name or company name of the freeholder - Cant remember off the top of his head
  
• Ground rent amount? £15.75p PA
  
• Service charge? None
  
• insurance amount, who arranges building insurance who pays for it etc? You arrange your own insurance, through a company of your choice, for just your flat - Price varies on company

• who carries out the maintenance of communal areas and building, and who is liable for the cost (usually split equally between the number of flats) ? It is shared and the cost is agreed upon and split by the 2 flats
  
• is there any reserve fund for repair work? no
  
• does the freeholder expect any repair work to be carried out in the next couple of years and if so ballpark figure for repairs? no
• especially as it is essentially gutted, what are the restrictions on decorations and alterations? Not aware of any. Nothing explicitly mentioned in lease in regards to alternations
• any restrictions on the garden? no
• iirc you said the leak in the roof was repaired when was this and is there any warranty left? It was the gutter part of the roof which leaked had new timber and fibreglass that was replaced - no warranty, happened 3 years ago.
  
• is there any restrictions to selling? no
  
• is there any fees in regards to selling, and fees for questions and information from the freeholder? There may be charges - this will vary depending on what solicitor you use and what they charge for leasehold properties.

There is no gas to the ftp floor flat, downstairs does have gas, so it may be possible to get access - but there is none currently.

Please note that this flat is a conversion - the freeholder mainly holds the name of the land and there are not usually many - if any restrictions for properties such as this one unlike large blocks of flats that usually have these types of rules and restrictions due to maintenance companies. This is all something that would be investigated by your solicitor - who will have a copy of the lease.

 

[Glaucus]

thanks, don't know if I should run or make a cheeky offer and if they turn it down walk away.
one thing I need to research but I forget the name, the freeholder is uncontactable however they're willing to by some insurance policy that would cover all costs if theres an issue? do you know what this is called as i cant find it on google atm.

other than that showed my dad around today, saw a few potential issues but nothing to major. Just think they are asking far to much for it with the freehold issues and the state of the property. if I did make an offer I think it would be 20k under asking and willing to go upto 15k under asking. This is assuming the freehold insurance thing doesn't put me off and im not sure how mortgages would handle it or if it makes it a no go.
any idea in this case how easy/cost it would be to by the frehold out.

and there's no building insurance s would have to pay that out of my own pocket, but doesn't seem to cost a huge amount unless there's a majour issue with that?

edit - A missing landlord indemnity policy