Thoughts on living in an apartment?

[menthel]

Leasehold is really not a problem, about 95% of all modern flats will be. It has a nice long lease, so that is not a problem. However check the service charge and ground rent- make sure they are not huge!

If you can afford to rent the place out after a year and won't need to sell it then it sounds like a good idea, there will be plenty of people renting and if you can afford to keep it that way for a few years you should ride out the current problems and then make your money back if not a little bit more.

[Lucio]

That brings up a few early questions:
Is leasehold really that bad? The lease in question is for 155 years.
If we bought a leasehold apartment, could we rent it out when we move to a house?
What else do we need to know about leasehold before buying?

The difference being basically, who owns the ground the property stands on, and the outside bricks. In a leasehold, a company owns the lease, and typically will appoint a management company to oversee maintanence. Sometimes with appartments, you can get a situation where a "Residents Association" owns the lease.

The leaseholder will have a contract for you to sign, and will control what you can and cannot do with your property. For example, on our one, we have to pay a £25 admin fee for each alternation to be looked out, once when we had Sky TV put up, once when we got the windows replaced and once again for the decking.

The length of the lease is usually irrelevant, unless it's due within the time you expect to stay within the property. When the lease expires, home owners are given first refusual on forming a Residents Association to take over the lease, with the attendant costs (a friend of mine was offered hers for £3,500).


Personally, if I were in your situation, with a large amount of equity available, I'd wait to buy, even if it's only the 6 months for a short term tennancy agreement. Try to rent a property similiar to the one you want to buy and try it out. Unless you're unemployed and renting off your equity, you really don't loose out that badly renting for a year whilst you and the housing market make up their minds.

[Nick]

There is one thing we've all forgotten about that makes renting a more sensible short-term option and that's the relationship factor...

You might well be better off renting to start off with purely so you know whether or not you can actually live together.

You never know, she might find it normal but you might get seriously irritated by her chewing her nails in bed or her constantly ringing her parents for advice... or she might get a major spiffy on if you leave the toilet seat up or watch TV in your underwear while burping the Euro 2008 theme tune...

So renting first to find out if you can live together 'warts and all' is going to be much, much simpler if things don't work out... moving in with someone and then finding out that the angel you've been picking up from her parents place is actually the inspiration for 'The Omen' when she's at home is a very messy situation to get out of if you've bought a place together.

[TheAnimus]

You might well be better off renting to start off with purely so you know whether or not you can actually live together.

My flat mate has really pissed me off again lately, because when ANY work is done on the flat, muggins here has to do it. Be it painting a room she thinks needs painting or emergency plumbing, i have to do it, and get no thanks, only complaints about the mess made. Really, really pisses me off.

[badass]

My flat mate has really pissed me off again lately, because when ANY work is done on the flat, muggins here has to do it. Be it painting a room she thinks needs painting or emergency plumbing, i have to do it, and get no thanks, only complaints about the mess made. Really, really pisses me off.

Tell her to do it herself then?

[Rave]

Fast forward a little bit, and we've now found a duplex apartment that we REALLY like. It's priced at just over 150k and is a top-floor place in a newly built block of 15. It'll be complete in September, and it seems perfect.

In regards to finance, we'd be able to put a decent amount down upfront, so on this kinda apartment we'd have about 80% of it paid off immediately.

If you have £120k in cash then in the current market you should be able to buy the place without a mortgage at all. Negotiating a 20% difference off asking price is certainly possible nowadays, I've heard anecdotal reports of even bigger discounts. The alternative for the developer might be not selling the place at all.

I still wouldn't do it personally, but if you decide to go ahead then for goodness sake make sure you haggle very hard. It is unquestionably a buyer's market and you should expect a big discount on asking price.

Problem! The apartment we really like is leasehold. The property developer tells us that all apartment blocks like this are leasehold, and they don't come as freehold. Other developers at other sites have told us the exact same - is this true? I don't know the exact ins and outs of freehold vs leasehold, I've just always been told to avoid leasehold like the plague. That same message has been echoed throughout the thread.

Buying a leasehold is risky just because the owner of the freehold/management company etc. can decide to charge varying amounts for work, or on the contrary they can fail to do necessary work on the building etc. (this can happen if other flat owners fail to pay their fees). You are protected to some extent by law as I understand it, but there is always the potential for costs and aggravation.

However, I'd prefer to live in a building run by a management company rather than one where the leaseholders collectively own the freehold, because then there's loads of potential for fallouts with neighbours who refuse to pay their dues.

...or, should we just rent for 6-12 months and then think about buying? I'd much rather my own place, though.

I really would rent. Far less risky all round.

There is one thing we've all forgotten about that makes renting a more sensible short-term option and that's the relationship factor...

living with someone is quite different from going out with them, and lots of couples find that living together doesn't work out. That's upsetting enough without having to go through the hassle of selling a place you jointly own.

[usxhe190]

To OP, just rent first. Put all the money into savings. You never know with relationships. Once you think relationship is going to the next step (marriage) then think of buying...property moves slowly relative to other assets.

Don't need to rush everything at once. Especially something that locks you in for a few years.

Sort out your commitment to each other first.

[menthel]

Actually, if you haven't lived with someone before then definatley rent. A friend of mine bought with her to be husband and they ended up splitting up having lived together for not so long. That probably over-rides any concerns about the housing market! also get a lease with six month walk away clause- can be very useful for a whole number of reasons!

[Saracen]

If you have £120k in cash then in the current market you should be able to buy the place without a mortgage at all. Negotiating a 20% difference off asking price is certainly possible nowadays, I've heard anecdotal reports of even bigger discounts. The alternative for the developer might be not selling the place at all.

I still wouldn't do it personally, but if you decide to go ahead then for goodness sake make sure you haggle very hard. It is unquestionably a buyer's market and you should expect a big discount on asking price.

In the general case, that's true and I would certainly try it. In fact, I did recently.

But in relation to a specific property, there's no guarantee they'll drop much at all, let alone anything like that. I recently put in an offer on a much more expensive property than that (a five-bed detached house, plus office, workshop and two large storage rooms, in a nice area) that was about £25k below asking. It was rejected out of hand. I kept quiet half-expecting a rethink if I didn't up the offer (if they were just playing the game) and heard nothing. I queried the agent, only to be told it would have to be close to asking price to stand a chance. They'd already rejected higher offers than mine. I was quite keen on that specific house for personal reasons (which had nothing to do with general market conditions), but it was not, in my view, worth what they asked. Really, not even close. A realistic market price, IMHO, wouldn't have been the £25k below asking that I offered, but more like £40k, maybe £50k, below. The ONLY reason I'd going as high as I did is for those personal reasons. That place has now been on the market for about 18 months and is, as far as I know, still (unsurprisingly) unsold. The reason, in my opinion, is that it simply isn't worth what the seller is asking for it. It evidently wasn't 18 months ago, and certainly isn't now (IMHO). But who knows, maybe eventually they'll get someone that falls in love with and is a mug to boot. Maybe, eventually, they'll get what they want, but it looks lie unless they do, they'll not sell.

Offers are certainly worth a try, and will often either succeed or set a starting point for negotiations, but it's certainly not s sure thing. If Parm's developer has a waiting list, or even very active demand, they'll be resistant to offers. If, on the other hand, they're up against it and demand in dwindling and they face cash-flow problems, they might accept a pretty silly offer just to reduce inventory.

[menthel]

Offers work, ours was accepted £33k below.

[Saracen]

Offers work, ours was accepted £33k below.

Sometimes. Mine wasn't.

[menthel]

You have got to try though, its about the only fun thing when buying a property.

[TheAnimus]

You should always try!

The flat i'm living in now was only on the market for 1 business day!

The vendor needed a quick sell, as the last one had fallen through. He had 3 offers for asking by the end of the day, so i bumped mine by a token £250 so it would be at the top of the list, and emphasised i was a cash buyer and wanted to have the survey done before the end of the week. As he'd been let down by a chain'ed person before, who was moving very slowly i think thats what tipped it for me, rather than the money.

[Saracen]

You have got to try though, its about the only fun thing when buying a property.

Most of the time, yes.

But there's a risk. If it's a seller's market, the risk is that you'll lose out to someone else that didn't try it on. And even in a buyer's market, if the offer is too cheeky, you risk alienating the seller. Not everyone that's selling is desperate to sell, and for many people, the offer price isn't the only factor. In fact, there's a number of things that a seller will take into account, including how they read the potential buyer. And if you put in a cheeky offer, they may conclude that you'll be nightmare to deal with, perhaps causing problems further down the line. If you put in a highly aggressive offer, then the vendor may conclude that you're not a serious buyer, or that you'll go ahead (especially while it isn't costing too much) but that meantime, you'll be putting in aggressive offers on other properties and if one gets accepted, you'll pull out of theirs.

A similar point is what Animus said in the post above - the fact that he was a cash buyer that wanted to move fast was probably what swung his deal. He upped his offer too, but it's quite possible that a vendor wanting a quick sale would accept a lower offer from a keen cash buyer because they're a keen cash buyer.

If you're after a bargain and hunting out of your price range, then putting in low offers is certainly one tactic, but it's dependent on being prepared to forget it and walk away if its turned down. On the other hand, if you (or the wife) have fallen in love with the house, you risk losing it with too low an offer. You may be prepared to take that risk, but if you've been hunting for months in order to find just the right place, losing it and going back to square one may not be an attractive proposition.

I've never yet bought a house at asking price, though sometimes it has been fairly close. But then, I've never yet bought a house I wouldn't walk away from if the deal wasn't right, and I have walked away if the vendor (or his agent) played silly beggars. So yes, in general, it's worth trying it. But there are times, and situations, where it isn't.

[menthel]

True, its all about the situation. Judging the seller and the situation can be difficult and certainly in markets past there was a big risk of losing a property whilst haggling as they were being snapped up so quickly.
I also think that success will be varied at present as sellers still have the previous state of the market in mind and have also started to drop the prices of their properties, perhaps not enough. There is a lot out there that has been on the market for a while or that has fallen through because of scared buyers.

[Parm]

Thanks again for plenty more sound advice. I'm going to head back to the apartment sometime later this week and see if I can get a second parking space, and what the best possible price for the apartment would be.