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.
Buying a flat for the first time? Our handy 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.
Read our step-by-step guide to the home-buying process.
Is it a good idea to buy a flat?
Whether buying a flat is for you, is a personal decision, based on your budget and needs. An added complication with flats, is that the majority of them 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. Pay particular attention to anything approaching 80 years, as leases for less than this can become much more expensive to renew.
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.
You need 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.
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 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 per annum. It’s also 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.
What happens if repairs or alterations are needed?
Signing a lease 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.
The Building Safety Act
The Building Safety Act came into law in April 2022. It aims to transform the design, construction and management of tall buildings to improve safety and avoid another tragedy like the fire at Grenfell Tower.
Part of the Act aims to ensure that the cost of removing cladding from unsafe buildings more than 11 metres in height doesn’t fall on the flat owners.
What this means for buying a flat in an affected building (i.e. one with five storeys or more) is that it will take longer, as more checks and documentation are needed. You’ll need to have additional evidence to get a mortgage offer, such as proof that your building will be fixed by the developer (if required) and that you’ll be covered by leaseholder protections laid out in the Building Safety Act. This means not all conveyancers will be able to take on these specific cases, and for those that do the conveyancing process will take more time. After Grenfell, the EWS1 safety certificate was introduced. Many lenders still require this in order to lend on flats in buildings affected by the Act.
Disclaimer: This article is for informal and general advice regarding information on buying a flat.