Advice: buy council flat or normal flat?
I work and live in London and I'm looking to buy a property here. I have two options and looking for your advice as I'm not sure what approach to go for.
1) Council flat
Disadvantages:
- it's in a council estate so it's not a safe / nice area and looks pretty scary at night.. the apartment block itself is also horrible and looks disgusting.. if you bring back a girl from a bar she will definitely be frightened entering the estate and then also disgusted looking at your flat from the outside.
- The flat inside is also is horrible and needs renovation which will cost around £30k
positives:
- it's in central london so the area is perfect prime location, easy to get to everywhere
- given it's a run down council flat in a pretty horrible council estate, it's very cheap... £300k (£330k with renovations) for a 2 bedroom so I could rent out the other room to friend which will cover some of the mortgage.
2) a normal flat (i.e. not a council flat)
disadvantages:
- it's really expensive.. more than double.. £650k for a 1 bed or £750k for a 2 bed
- service charge is also insanely expensive you have to pay £5k a year service charge at most flats in london which is ridiculous.. some new builds are £10k...
positives:
- everything i guess: safer, nicer, modern, no need to do any rennovations, no need to worry about a girl running away after seeing your council apartment etc..
Go for quality. You don’t need to rough it with the plebes.
wow how big is that normal flat? Prices there are wild.
NYC vs London
https://www.numbeo.com/property-investment/compare_cities.jsp?country1=United+Kingdom&city1=London&country2=United+States&city2=New+York%2C+NY
interesting, i did not expect london to be more expensive than new york city. london prices are on avg 7% higher than NYC
I bought a 3bd new build a few years ago (1200-1300sq ft), obviously everything is new so didn't have to renovate. service charges are around £3k a year, we have some cool features of the development that require upkeep/maintenance. this isn't central London, but it is a 15 min train to London city. my advice would be to move out a bit so you can buy a bigger property in an area that will eventually be gentrified. just a personal preference - but perhaps I've just heard too many stories of people buying houses in brixton and hackney for <£200k 15 years ago for them to be worth >£900k now. something that you might not consider at the moment is that new builds are well insulated and don't require much heating/electricity.
Hey thanks for sharing your thoughts and situation, helpful perspective to think about moving out of central but I still find your service charge extremely expensive for something not in central london and i see two main problems with that:
1) do you really want to be paying such a high service charge? £3k per year over the course of the average 30 year mortgage term, means you're paying an extra £90k
2) service charges regularly increase, did you hear about some of the new builds in london? services charges started around £3k then increased to over to £9k within a few years.. you're at risk of the developers/owners screwing you by increasing the service charge whenever they feel like it, subject to your leasehold contract which usually states they have the ability to review/increase service charge
3) you never truly own the property, once your lease term expires you have to either pay £250-500k to renew it another 100 years, or it goes back to the building developer/land owner which means if you won't be able to pass it down to your kids, where as ex council are normally either free hold or very long lease terms like 900 years so you never need to worry about this.
4) good point around the well insulated new builds i have noticed they are very efficient especially during winter but i also noticed they are extremly hot during summer which makes it hard to sleep and then (i guess) you need to spend a fortune on electricity for air conditioning
keen to hear your thoughts on these points and if you'd still prefer new build over council
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