Right to buy council flat – is it a good idea?

by Readers Question

9:15 AM, 2nd December 2019
About A week ago

Right to buy council flat – is it a good idea?

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Right to buy council flat – is it a good idea?

I am in the process of obtaining a mortgage for my current council flat. I have a large tenant discount so only need a mortgage of £64k. The council valued the property at £170k, but I had an estate agent value the property at £200k.

The agent also mentioned that with home improvement other flats in the blocks have sold for up to £260k. Also because it is a sort after area (good schools, close to transport links, Greater London) demand for private rental in my block is very high.

Rental income could be £1300 per month. My issue is as it is a high rise concrete block Lenders have been hard to come by and I’m worried that it will be difficult to sell for this reason in the future. Should I take the risk and buy?

I’d appreciate advice from those that have done this before or have any experience in this area.

I feel like this will be the first step into property development and the start of a portfolio.

All advice is welcome.

Many thanks!

V



Comments

Michael Barnes

16:15 PM, 3rd December 2019
About 6 days ago

Personally, I would not buy a property that has a council freeholder.

High costs for "necessary" work often follow.
These are covered by the tax payers for council tenants.

Puzzler

7:35 AM, 7th December 2019
About 3 days ago

You say there are no planned works for the lifts - in my experience it's the unplanned works that you need to worry about, if the lifts break down it could cost tens of thousands

also you say your husband has his own company - the works described are not in your flat but in the communal areas so your husband's expertise is not relevant

Harlequin Garden

13:54 PM, 7th December 2019
About 2 days ago

Reply to the comment left by V at 02/12/2019 - 17:55
To purchase a second property - keep this one, release equity and buy another - will incur an extra 3% stamp duty plus no tax relief on your rental mortgage and you'll have to have the mortgage on your rental on a buy to let basis - it may not bother you much if your area is not in a high value area but always something to consider.

V

21:45 PM, 7th December 2019
About 2 days ago

Reply to the comment left by Puzzler at 07/12/2019 - 07:35
Hi, I double checked and the lifts are due updating and this is in the breakdown of service charges for the next 5 years. It’s not a lot at all.

It’s a well looked after estate and as I said it’s in an area of high demand. Private 2 bed flats go for 300k in my area. Estate agents have said there is high demand for flats in my block.

I’m gonna go for it, it’s the only way for us to get a foot on the ladder! 🙂

Thanks for your input.

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