Like a deer in headlights has never been more accurate of me as when I bought my first flat 4 years ago. I knew NOTHING. I genuinely didn’t and I’m not afraid to say that. I never googled anything, I put an offer in on the first flat I felt in love with and I learnt a lot of lessons the hard way.
Whilst buying any property can be a hard, extensive and expensive process, buying a flat brings so many more elements into the mix. If you’re in the process or about to start searching for a flat, here are 9 things that you need to check before buying a flat, and essentially signing your life away..
1.The Length of The Lease
Before you even view the flat, check with the estate agent what the length of the lease is. You want one that is long and not less than 80 years. Anything below 80 and you’re heading for trouble in a) getting a mortgage on the property and b) it may decrease the property value.
When I bought my flat it just had a new lease on it which was a healthy 99 years, you just need to be mindful that you will want to sell it in advance of it getting low because it can be harder to shift with a lower lease.
2. Ground Rent
What comes with being a leasehold property is the ground rent that is due each year. As i touched upon in my blog on the pros and cons of buying a flat, as a general consensus £50 seems to be the ball park figure for a yearly ground rent figure. But it can be more. Mine was £250 a year and this can cause problems with lenders due to the saleability of the property with a high ground rent. I’ve only recently learnt that the figure I was paying was astronomical and it was grossly inflated to basically just be pocketed by the leaseholder at the time. I also know of people who pay no ground rent, so it can vary.
3. Service Charge
The service charge fee is the most important of the two as it’s the most expensive. There is no ball park figure for this one as it varies on location, block size and if there are additional things to service such as lifts. For an example, my flat was in a property of 5 and I paid around £600 to £1,000 per year. Whereas I know of apartments that charge £4,000 a year. You need to be able to reasonably budget for a service charge and some warrant almost needing another mortgage! You need to really take into consider how much extra you can budget for this each year and it will also impact the saleability of the property when you move on. The estate agent should be able to provide you with this and the ground rent before you even visit the property.
4. Is There A Residents Association?
A residents association is a group which represents and deals with the leaseholders interest and in some cases actually manage the building maintenance and services that are required. This can be a good thing to have because you have an instant port of call to see what the property is like and if there are any issues prior to purchasing. Having a group of people to champion and represent you can really help when a faceless management company can often be hard to communicate with directly about issues.
5. Are There Restrictions On The Property?
You may own the flat, but the leaseholder owns the land on which it’s on and they can often dictate restrictions on the property. They might not allow pets, holiday lets, music played after a certain time etc. You probably won’t get to find out about these aspects until it comes to the lease work with your solicitor.
6. Can You Make Alterations?
If you’re planning on making changes to the flat you’ll need to check in the lease what the stipulations are, you will be able to check with your solicitor regarding this. It could involve small changes such as changing windows, doors or removing internal walls.
7. Are There Additional Costs Involved?
There will always be a ground rent and service charge, but are you going to incur any further costs? Certain other costs can occur at the start of the transaction of the flat which can include one off setup fees with the management company, there can also be admin fees for getting your mortgage set up.
8. What Is The Heating System?
It really does make a difference whether you have a combi boiler or an electric only boiler. Quite a lot of modern flats these days do have electric only so there is no risk of gas leaks in a property. The difference in price is absolutely astronomical for electric only, for a 1 bedroom apartment I was probably paying 2/3 more than someone who had a 3 bed property. Whilst electric does seem to be a safer option, it’s not a legal requirement in flats and it makes things £££.
9. Location of The Flat
Okay, we all know that location is everything when it comes to property. You can have a beautiful house in a terrible area, but you can have a house in ruin in prime location and the value will continue to increase. You cannot change the location over time. It’s worth going to the area at different times during the day to get a sense of what the area and neighbours are like too.
Buying a flat can be a stepping stone onto the property ladder and also for a buy to let investment, just make sure you do your research beforehand so you don’t encounter any surprises. If you enjoyed this blog, you might also like to read The Pros & Cons of Buying A Flat and Buying A Home On Your Own – How I did It.