What To Consider When Buying Ex Council Property in London
Buying an ex council property in London can be an excellent way of getting a foot onto the notoriously difficult London property ladder, but how can you tell whether the property you buy will be a first class bargain or a one-way ticket to trouble?
Those living in a council house or flat were once stigmatised as the scourge of society. The losers, the wasters: those who were unaccepted in polite society. But the sale of council property, in London especially, changed this and apart from a few 'sink' estates, ex council property is generally seen to be on par with any other property in London.
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The social divide created by council property, the estates in particular, has been disappearing since Margaret Thatcher's 'right to buy' scheme was introduced in the 80s, with the result being that certain ex council properties in London are actually considered fashionable and are increasingly sought after.
Most ex council properties have seen a marked upswing in prices, allowing those who bought their homes under the scheme to move on, leaving young professionals to move in, especially to the areas that offer easy access to the city. Where ill repute once reigned, a much sought after social cachet has since developed.
Trellick Tower in Notting Hill as an example of ex council property in London that has gone from being a 31-storey tower of social deprivation where 'decent people' feared to set foot, to one of the most sought-after addresses amongst London's young and fashionable. Designed by Erno Goldfinger, the man who lent his name to the infamous Bond villain, Trellick Tower has since received a grade '2' listing and apartments - the word 'flats' is deliberately avoided - with large balconies offering views across London and the North Downs are selling for up to £200,000.
Another example is Boundary Estate, in London's East End. This was the first council estate in the country, set up by the newly formed London County Council during the 1890s in order to help those who were living in squalid slums under deprived conditions. Once a warren of crime and corruption, Tower Hamlets council has worked hard to clean up the estate which, thanks to its close proximity and easy access to the city, is now attractive to young professionals looking to buy their first property in London.
But how can you tell, when looking at ex council property, whether the estate you're considering buying on is reputable or not? Look for the following signs:
- Cleanliness - Are the streets heavily littered? Unless the area isn't a busy thoroughfare, as is the case with some areas where you might view property in London, this is most probably a sign that the inhabitants have little respect for their estate.
- Graffiti - Almost any area can have some graffiti but areas where graffiti is prevalent are likely to still be socially deprived.
- The State of Repair - This is important for two reasons.
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1. Property that's in a bad state of repair can mean that the local authority is slow at following up calls for repairs to be made and doesn't perform regular maintenance jobs satisfactorily. However, as the council may no longer have responsibility for privately owned property, it's important that you know whether the properties that are a bad state of repair are ex council properties or still part of the council stock.
2. Property that's damaged can be a sign that the inhabitants have little respect for their homes. If they don't respect their own homes, will they respect yours?
In order to decide the reason behind the disrepair, you'll need to weigh this up against other local factors as well as looking closer at the properties themselves. Are the curtains clean? Have windows or doors been kicked or punched in? Your own intuition should tell you a lot about the people living in the properties.
One way of getting a feel for the residents when buying ex council property, is to pop into the local pub. Once you've spent half an hour or so amongst them you'll have a better idea of the type of people you can expect to live amongst if you go ahead an buy a property in London on that particular estate.
Finances
Once you've found a property that's in an area you're comfortable with, it's time to look at the financial side of buying an ex council property in London.
Financing houses and low-rise flats that are ex council properties is generally no more difficult than with any other kind of property, although lenders do appear to prefer purpose built flats over conversions.
However, finding a mortgage lender who will be willing to finance an ex council property that's within a building of more than five floors can often prove very difficult.
There are two main reasons for this, the first being that such flats, with the occasional exception such as the case of Trellick Tower, are often considered bad investments due to the general lack of interest in them (hence their low market value).
The second reason, and probably the most important for those considering buying ex council property in London, is that high-rise blocks of flats are expensive to run with huge repair and maintenance bills being offloaded onto the owner occupiers.
However, there are lenders who are willing to offer mortgages on this type of flat but the interest is likely to be higher than on other types of property in London. You should also bear in mind that because of the mortgage problems, flats in high-rise blocks will prove more difficult to re-sell than other types of ex council property.
Apart from the question of financing the property, it's also important that you check that there are no major expenses expected in the future. Very often, ex council properties are bought on leasehold with maintenance, repairs and improvements still being council responsibility. If you haven't calculated with these extra expenses, you could be putting yourself into a financially vulnerable position.
Find out how much general maintenance bills are and whether any major improvements are being planned. Some owners have had to face bills of up to £90,000! While such high sums are unusual, bills of £20,000 are not. Unless you thoroughly investigate this issue, you may well end up buying a property in London that's far from the bargain you believe it to be.
If you decide that any future charges you can expect are acceptable, check that the seller is up-to-date with his own maintenance payments as you may well find yourself liable for any debts attached to the property.
It's also worth looking at the council tax band of the ex council property you're interested in as these properties are often banded lower than equivalent property that has never been council owned.
By using a common sense approach to buying an ex council property in London, it's certainly possible to become the owner of a home to be proud of in an area that has easy access to the facilities of the city and central London. Your property may also afford you a very healthy profit should you decide to move on in the future, depending on the popularity of the estate you choose.
Oh, and do remember that as the owner of an ex council property in London, remember that you no longer need a Cortina on bricks in your drive or mock Tudor affectations to be accepted by your neighbours. An Audi TT or a Shogun is perfectly acceptable these days.
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