The Pros and Cons of Buying A Flat UK (Why I'd Never Buy One Again)

if you're about to buy a flat in the UK you're going to want to watch this video as a flat owner myself I am going to be sharing The Good the Bad and the very ugly that even involved a drug dealer living in my property and let's just say buying a flat has buying and selling a flat has been a wild ride for myself and I really wanted to be so transparent I wanted to share the good and the bad from someone who's actually owned a flat in the UK and I think that's really important to know there's lots of things online about people sharing pros and cons but until you've actually been through the process and lived it yourself I can share some of the hidden things estate agents won't tell you and the things you won't find on Google unless you land on my blog so if you're about to buy a flat and you want to know a little bit more let's get into the video so before we start with the pros and cons I just want to make it clear what a flat actually means and other terms you may have had a flat called at least hold property now a leasehold property basically just means you own a lease agreement with the free home you don't actually own a brick or the property whereas if a house which is called a freehold although some houses can be known as a leasehold as well a freehold basically means you own the property outright obviously you have your mortgage but you don't have a lease agreement like you do with a flat and this is a really important thing to remember you don't own a brick with a flat okay so now we've got that covered let's get started with the pros I really want to start this video on a high and I do want to share that this set can be some positives to owning a flat now hitting it off at number one flats are generally more affordable than houses I mean it was definitely true in my case if you're a first-time buyer if you're a single buyer on your own Flats can sometimes be the only way to get onto the property ladder now one bed flat is considerably cheaper than a two-bed house and in my eyes it feels slightly more attractive than a one bed house because a one bed house you might as well just have a flat without all the additional maintenance that comes with it um but yeah one bed flats are generally much cheaper easier to get onto the property ladder and you don't need so much of a deposit in terms of affordability if you are on a single salary it sometimes is the only way you can get onto property ladder and this is definitely true for a lot of people in the UK where Rising house prices and inflation are taking place and again in London flats are still a very very popular form of accommodation if you want to buy now modern apartment blocks can also be so much more secure than the house and when I was living on my own this was definitely true I didn't want entering exit points and loads of Windows to worry about I was in a property with four other flats it was so secure we had an intercom system so if anyone rang we could see who they were and no one could come into the main entrance Door unless someone let them in so it was really secure and in modern apartment blocks you do have that additional level of security and give you a really good peace of mind and if you are living on your own you're worried about safety it can be a better alternative to living in a house now it really is personal preference but having a flat can be a lot easier to manage you don't have a garden space typically so you've got none of that maintenance to worry about and because you do pay a service charge and any maintenance surrounding the property or through the property like the communal hallways is covered the cleaning is done for you or it should be for your um whoever your Freeholder is or managing company and so clean is taken care of if something happens with the door the roof your service charge that you're painful goes towards that and you typically have a managing agent that takes care of everything so you really don't have to lift a finger outside of your full walls in your flat now the only upside I will say to having a leasehold property is that when you have a house and it's a freehold property you own everything to do with it from the roof down to the concrete structure of the house and the path out the front and everything so if something goes wrong majorly wrong like a roof leaking you will have to Fork out fifteen thousand pound or more to sort that roof from your own money however with a flat you pay into your service charge you will have a sinking fund and or you should do and that gets put aside and essentially if there is a big issue with the property if a roof does need fixing the managing agents can call on that sinking fund and they can use that towards a roof leak to see if there is no sinking fund that comes into your service charge this may be given as an extra charge on top of your service charge however in terms of sorting the problem the management agent has holds the responsibility to do that and your service charge should essentially cover any major works like that whereas with a house you don't have the freedom of it and you often have to get the work sorted and paid for upfront and another thing about Flats is sometimes they can be a little bit easier to sell than houses in the fact that there are always buy to let investors Airbnb hosts out there looking for properties that they can that they can let out to people and they can do Airbnb rentals for that are in a really really desirable location so if your flat is in a desirable location you're really on to a winner it was definitely true for the flat that I had I was in an Airbnb Hot Spot by the sea in Plymouth and and actually three of the other flats um in my property were airbnbs as well so if you pick a flat in a desirable location you're already off to a winning start because you know people are still going to be interested in that property years down the line so location is really important buying a one bed flattener not desirable location is a completely different story to getting one in a desirable location and that's something that I will come on to in a moment when we start talking about cons and really if you like everything managed for you you don't want to have to care about maintenance you don't want a garden to look after a flat really can be a great choice it's still one of the only ways that many people can get onto the property ladder um and I'm never ever gonna criticize people that choose to buy a flat I had one that was all that I could afford but I think it's really really important to be very transparent and open about the disadvantages of owning the flat and the things you really need to be aware of before you sign the contract so let's get started with the cons and I am really sorry but these are going to be a little bit longer than the pros that I just spoke about now with a leasehold you own a lease essentially your lease ranges in years okay so your lease could be anything from one year left to 999 years if it was a brand new lease now generally speaking the longer your lease the better it is you do not want to be having a property you do not want to be buying a flat that has less than 100 years on the lease because you're ever getting closer to that 90 years when you're gonna need to start doing a lease extension now when your lease gets to 80 years something called marriage value comes into play and the shorter your lease becomes the more expensive it will cost to renew your lease and essentially you can obviously let your lease run down to zero years but if you do that the Freeholder will take back your property and this just goes into the fact that you do not own your property you do not own your flat you only own a lease agreement so it's really important that you don't ever let that happen lease extensions can be ridiculously expensive and when I was having to look at this when I was doing when I was selling my property and we're talking you know 10 15 grand plus and it can really vary depending on who your managing agent is and what they charge so if you are buying a flat make sure that that information is provided to you by the estate agent if you do have a really long lease then this shouldn't be any issues with it but remember try and look for leases at over 100 years because I don't want you to get to that 90-year point when you're going to have to start looking at least extensions and you're suddenly going to have to Fork out a lot of money now the crazy thing about affordability when you're trying to get a mortgage is that most mortgage lenders will say that you're not able to borrow on a house because it's too expensive however with a flat you don't just have your mortgage payment you have other payments on top which once you add them all up it suddenly becomes more than if you had a mortgage on a house so with your flight you have your mortgage payment you'll have your service charge so your service charge is something that is organized on a yearly basis but you may be able to pay it monthly depending on who your managing agent is your service charge can range so vastly it totally depends who your managing agent is and for me our service charge was around 1 500 to 2 000 a year but if you have things like lifting in the building or anything that needs lots of servicing then your service charges are going to be a lot higher now there is a block of flat simplified I know for a fact the service charge is around 6 000 a year and it's going to be even more in places like London where lots and lots of Apartments have to be serviced and looked after so you've got that huge cost to think about and you also have your ground rent now the ground rent doesn't actually go towards anything it just goes to the landlord and it's essentially to just secure your lease so ground drinking vary as well and we'll come on to how this can cause a lot of difficulties when purchasing and selling a flat my ground went was 250 pounds a year which generally isn't actually that much money but it will cause problems with your lenders but your ground rent is something you have to pay each year and if it's not something that you pay and you cut and you fall into your ears again the landlord can take your property away from you now ground rent I just want to mention here is one of the biggest problems with selling any leasehold property right now I don't know when it came in I'm thinking it came in around just before lockdown um but ground rent wasn't ever an issue when I purchased my flat it was 250 pounds a year and that was that it was only when I became selling the property that the issue reared its ugly head now any ground run that's over 250 pound outside of London it falls into something called an AST which is an assured short-hole tenancy and this essentially means that if you fall into areas of your ground run and you don't pay on time the landlord can take your property away from you and this understandably causes a lot of concern for lenders because it would mean they would end up with nothing after lending you all of that money and recent and I sold my property back in 2021 but since then the issue has become even more widespread it's affecting people that have ground rates of 150 pound it's affecting people that have Rising um increases of ground rent and that's also something to mention as well your lease will pertain how your ground rent increases so mine for example was an increase of the rate of RPI every 10 years it can be fixed amounts every 10 years it just again it varies on your lease so that is something that mortgage lenders will be looking at quite heavily as well and the alternative when you're trying to sell it or trying to purchase is your mortgage lender is not going to lend on it anymore I was able to sell for Indemnity policy but I know that a lot of lenders aren't accepting that now and instead people are having to go down the deed of their variation brew and also lace extension route a lease extension route is more favorable it will add 90 years to your existing lease and it's also going to reduce your ground rent to a peppercorn or a nominal fee such as one pound so lease extensions are great but again as I already mentioned they cost thousands of thousands of pounds so it can become unattainable for a seller or even a purchaser if people are wanting to sort of balance the cost between one another and one thing I will mention here is that the leasehold reform was meant to happen back in sort of lockdown time it's now been parked until November this year it may introduce some features to benefit a leaseholder where ground rent might be reduced or capped but there is nothing to be seen of that yet so I really can't comment on that but as it stands ground run is a huge huge issue for people buying and selling Flats so again if you are in the process of buying right now make sure your estate agent gives you that information because if you get into the process later down the line with your solicitors it's going to cause a huge delay lease extensions and deed variations can take some months to complete depending on the margin agent that you're dealing with and going back to service charges service charges just like ground rent can increase over the years this will be laid out in your lease service charges account for literally everything from the stamps that the managing agent uses to send the invoices to your house notice boards in the hall cleaning guttering they will usually account for anything and everything at the start of the year whether that is service is used in the property or not so they essentially say that anything that isn't used in that budget for the year they will hold back and enough about the boring legal stuff although that is so important it's the most important things you need to listen to In This video and remember when you're buying a flat but of course you do need to be more mindful about other things such as where your flight is positioned and I was in a very very desirable location I was really lucky where I purchased because I knew it would have a really good resale value however if you are sandwiched between two Flats you need to be mindful of noise I could constantly hear a child running back across the floor on a Saturday and a Sunday and it was so so noisy um and obviously things like carpeting rugs can help but you know a lot of people don't want to speak to their neighbors as I found out I was unfortunately had a drug dealer above me and there were lots of police calls and it was just awful and when you're in that position that is your home you're essentially sharing your home with other people that you don't necessarily know and that's a really big thing to remember when you have a flat you just cannot help or know who your neighbors are going to be and it can cause your life to be a misery if they turn out to be really bad which minded luckily they they went after three months but yeah it was a really difficult time and I think that is one thing people don't think about in flat and also I wasn't a property that had free of Airbnb properties now a lot of lenders won't allow you all leases will allow you to run out on an Airbnb basis but because they were Airbnb properties we had people coming and going at literally every goddamn hour they were noisy we had people been sick out the front from nights out and it was just not nice it never felt like my home and it's really really difficult because there's nothing you can do about it unless your lease says that Airbnb hosts aren't allowed and one other thing I want to mention that's really important is generally flats are more difficult to sell than houses especially if you have a one bedroom flat the market for people that want to purchase that is going to be so much Slimmer than say a two bedroom flat or a house and that's because it doesn't give you any room to grow as a family it's only really sort of suitable for first-time buyers who are single living mother on the road or in a couple and but really the window is a lot smaller there will be some obviously buy to let investors that might want to choose the flat but houses are so much easier and it also comes down to selling time flats take so much longer to go through than houses I mean houses can typically lead two to three months Flats can be so much longer because of the information that comes in the lease and the questions that will undoubtedly go back to and from solicitors and the the purchaser and for my own flight it took five months the process to go through but it can be so much longer if you need to do data variations and Lease extensions and this can run into a six month 12 month and even longer than a year process and if you want that flat to go across the line so guys those are the pros and cons of owning or owning a lease agreement for a flat in the UK and it's really good to balance the pros and cons what is suitable for yourself and your personal individual situation is it all you can afford at the moment can you stretch to a house in maybe a six months or a year time and also just be mindful about the legal implications ground rent service charges and leases is really important to look at with your estate agent and solicitor and if you're ever in doubt walk away from it Flats can be really really stressful um but I don't speak for every single flat in the UK there is probably some really really good managing agents out there and some flats that have great leases and very low service charges and ground rents but you do need to be mindful that leaseholders are not favored at all by the government and from landlords I was owning a flat as a single person on a single salary and as the service charges kept increasing the invoices kept coming through the door it became a real worrying concern for me and I was suddenly paying more than my house mortgage is right now and it can be really really scary if you're on your own and they just ex and they just send demands if you haven't made your payment and they sometimes 30-day payments and you've got no choice but to pay it and I don't ever want anyone to get into that situation so I just want you to be armed with the knowledge of what owning or buying a flat in the UK can actually bring and always always seek more information if you need it I've linked some of my really useful blog posts in the description below about leasehold property and I've also linked to my other video on why I would never ever buy a leasehold property again so if you are buying a flat or you want to buy a flight you're considering it please head over to that video next because it's full of so much more of what happened during my flat buying process but I hope you enjoyed watching today's video and if you enjoyed it please do give it a thumbs up and I look forward to seeing you soon

Channel: Sleek-chic Interiors

Views: 105,734

Keywords: leasehold, leasehold scandal, buying a flat, apartment

Id: 0TWrmjmGeiI

Length: 17min 10sec (1030 seconds)

Published: Thu Aug 31 2023