1

What are the risks of investing in ex-local authority/council properties in the UK? I am referring to purchasing from a private landlord an apartment that was built by a city council for social housing in the 1960s-1990s (and then sold it off with right-to-buy schemes). Typically, these properties are part of larger estates and are leaseholds. The council still owns the ground.

For example, there are a lot of ex-council apartments in London in central locations for 30-40% less than on the "normal" real estate market. I read about the following risks as a landlord:

  • Anti-social behaviour on the premises
  • Regeneration: Councils might purchase the property back to demolish it with compulsory purchase orders (typically to license the land to private developers).
  • Costs of compulsory maintenance work (for example changing cladding)

Any other risk?

EDITED: added clarification

  • Anti-social behaviour can exist around (almost) any property type across the UK, not just around ex-local authority/council properties. – trashpanda Jan 21 at 15:24
  • 1
    Are you talking about recently ex-council properties, or ones that used to be council owned decades ago? – DJClayworth Jan 21 at 15:35
  • Make sure you know the exact year of the build and whether it may contain brown asbestos, as this could turn out to be a maintenance nightmare later on: asbestosvictimadvice.com/2016/01/… – binarymax Jan 22 at 20:24
1

Buying an ex-council property, like any home, comes with its own risks and rewards. As your question is asking for the risks, The biggest risks can include:

Because there are often negative stigmas attached to council estates in the minds of buyers, it can be tricky to resell at a good price.

For example, Winkworth's estate agents found that "prices are roughly 30% lower for ex-council." but there is, again, an "ex-council stigma".

The same article mentions liability: When buildings become 100% owner-occupied, the owners tend to set up a management committee. If there is a mix, however, the council will be in charge -- this is also something you'd need to consider before purchasing and could be considered a risk to some.

1

A big risk for a council apartment is that the building will need substantial work done on it in future. This could include major renovations because the building is substandard.

Rent-paying tenants don't have to pay for the work, the landlord does. But if you buy a long lease on an apartment, you become liable for your share of any building work.

Your Answer

By clicking "Post Your Answer", you acknowledge that you have read our updated terms of service, privacy policy and cookie policy, and that your continued use of the website is subject to these policies.

Not the answer you're looking for? Browse other questions tagged or ask your own question.