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A flat is a popular choice for a first home. It’s often more affordable than a house and, if you want to live in a city centre, flats are generally much easier to come by. However, there are things you need to know when buying a flat, and our guide will take you through some of the most important points to consider.
Need more help as a first-time buyer? Read our first-time buyers guide.
What you should know before buying a flat
As with any property purchase, there are lots of things to consider before you buy a flat. You may question the practicality of being up one or more floors, whether you need a lift, what communal spaces there are and the refurbishments you’re allowed to make to your home. You’ll also need to find out about things like leases, service charges and ground rent.
We’ll guide you through some of the most common questions people ask when thinking about buying a flat below.
Read our step-by-step guide to find out what conveyancing is.
Is it a good idea to buy a flat?
Knowing whether or not buying a flat is for you, it's a personal decision, based on your budget and needs. However, an added complication which you will need to factor in is that the majority of flats are leasehold.
Although freehold properties are usually more desirable, buying a leasehold flat can still be a perfectly good option if the lease lasts for hundreds of years with agreeable terms attached to it.
Find out more about buying a leasehold property and what it entails.
As part of your contract with the freeholder, you may have to fulfil certain other requirements as a leaseholder. These can include behaving in a neighbourly manner, properly maintaining the inside of your flat, requesting your freeholder’s consent where appropriate for things like pets, sublets and renovations, and promptly paying a share of maintenance costs should they arise.
Additionally, it's important to be aware of other less predictable costs that can significantly impact your budget. For instance, management companies might impose extra charges for administrative tasks such as changing their records to reflect a new owner or providing necessary information for mortgage processing. These fees can add hundreds of pounds to your moving expenses. Understanding these potential additional costs upfront will help you budget more effectively.
It's a good idea to find out what the obligations are as a flat owner before you put an offer in, to assess whether it’s a suitable option for you. Being well-informed about both the predictable and unpredictable expenses will enable you to make an informed decision and manage your finances more efficiently.
How long is left on the lease?
With a leasehold property, you're effectively buying the right to live in that property for a set amount of time, which can be anything up to 999 years. As time moves on and the lease changes hands, its value reduces. It’s vital you know how long is left on the lease—this should be in the property listing, your conveyancer will also check this for you.
Mortgage lenders often require that properties have at least 70 years left on their lease. If you buy one with less than 80 years of lease remaining, you may find it challenging to sell in 5 to 10 years' time. Extending a lease can cost several thousand pounds and take many weeks to manage, so if the lease is running out, you should consider negotiating an extension before you buy.
You can read more about how to extend a lease in our article.
Are there any restrictions on the property?
We'd advise asking the estate agent or seller if there are any specific restrictions that could significantly impact your lifestyle. For example, some flats may prohibit the ownership of pets or restrict noise levels, such as not allowing music to be played after a certain time.
There can also be restrictions on modifications to the property such as removing carpets, knocking down internal walls or updating the windows and doors. Often, making alterations isn't as straightforward as it seems; you might need to secure written consent from the landlord or freeholder before proceeding with any significant works.
These types of restrictions are not always immediately apparent, so if you decide to purchase a flat it is advisable to have your conveyancer double check whether there are any such limitations that would prevent you from enjoying activities or making changes that are important to you.
How much is the ground rent?
Ground rent is the regular payment a leaseholder makes to a freeholder for the privilege of having a property on their land. It may be as little as £1 a year, but can be much more, and it’s payable either annually, twice a year or quarterly. It can be fixed or escalating, which makes it one of the most crucial things to look out for when buying a flat. You don’t want to get stuck with ground rent that increases by huge amounts, as this can become very expensive and cause you a headache if you want to sell your home.
Is there a service charge?
Service charges are an essential aspect to consider when moving into a new property, as they can significantly impact your budget. These charges can cover anything from simple maintenance to gardening tasks, concierge services, and swimming pool upkeep. They can vary significantly between different buildings and are typically between £3,000 to £20,000 a year.
Knowing the details of these service charges helps ensure there are no surprises after you move in. Ask the property management for a detailed breakdown of the service charges and enquire how often these costs are reviewed and adjusted. This will give you a clear picture of the ongoing expenses and help you budget accordingly.
Additionally, it’s worth checking if there’s a sinking fund on the building you’re interested in. This is a reserve fund that’s been collected to cover any planned or unexpected works. The existence and status of such a fund can be especially important in older buildings where significant repairs might be necessary.
Is there a management company?
It’s important to understand who you’ll be interacting with regarding your flat, the building and the lease. You’ll be dealing with these people regularly, paying service charges to them and asking them to fix any issues that arise. Therefore, knowing whether you'll be working directly with a professional management company or an individual landlord is essential. This knowledge will help you manage expectations and prepare for the type of communications and transactions you might expect throughout your time in the property.
What happens if repairs or alterations are needed?
Signing a lease (as part of your leasehold flat purchase) means you enter a contract that determines things like responsibility for maintenance issues, the fees payable to the freeholder and permission to make changes to your property.
Your service charge may not include the cost of major repairs, such as the roof, so find out before buying who would be responsible for such costs and how they’d be shared. There may also be restrictions on alterations – check with your solicitor what your lease allows.
Is it more difficult to get a mortgage for a flat?
Getting a mortgage on a flat depends on many of the same factors as with a house: eligibility, deposit amount, affordability. However, there are some additional considerations for mortgage lenders:
New-build flats can be an issue as they tend to devalue in price once they’ve been purchased.
Flats within commercial buildings, for example a flat above a shop, might be an issue for lenders.
The Building Safety Act (more on that below) means that many mortgage lenders are reluctant to lend on flats in buildings of five or more storeys.
Some flats are freehold, though this is rare, and most mortgage lenders won’t lend on them.
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