I am renting a flat (1 bed + box room) with my partner in 'central' Edinburgh. We pay £675 pcm. Our landlady wants to sell it urgently and she asks for £160,000. She is keen to sell it to us. A similar flat was sold 5 months ago in the same building for £158,000 (1 bed, no box room).

We went to the mortgage advisor and he said that it is a no brainer, we should buy it. Apparently, this flat could be sold in the open market for £175,000. Also, he mentioned that we are in a good position for negotiating, since the owner of the flat can save a lot of money doing a private sell.

We can start with a 35 years mortgage of around £500. Similar flats in the area are being rented for approx. £800.

I have two questions:

1) We are a bit scared about the potential negative impact of Brexit in property value, and we are not too sure if we will stay in Edinburgh long term, but 3 years is for sure. So maybe we will have to rent it after 3 years. Is £300 enough for property maintenance and other possible taxes?

2) We are pretty new to mortgages, so we were wondering what numbers we should bear in mind for the negotiation and therefore try to reduce the price she is asking for.

Thanks in advance.

1 Answer 1


Brexit will probably hurt property values in the short term, but as long as you don't plan on selling in the short term, this isn't that big of a deal. House prices will eventually recover, and rental prices are less wobbly than house prices.

Be sure you know the costs of any common building maintenance fees, and if any big work is coming up that's not covered by those fees. Your landlady could have just gotten a letter that says "FYI, we need to replace the roof in the next year, and there's no money for that, so we'll be charging owners", and not wanted that extra cost.

The rule of thumb for repair costs is 1% of the property's cost per year. This is for single-family detached housing, though, and a flat is going to be less than that. You know your flat better than I do, though. For taxes, you should be able to get that info either from your landlady or your mortgage advisor. I'll note that your landlady was renting to you for £675, so that should be a reasonable guess as to mortgage+maintenance+tax costs.

However, it is not necessary for incoming rental income to completely pay mortgage and maintenance. Recognize that you're accumulating ownership in the property, and that has value as well. That being said, you won't have a renter 100% of the time, and it would be bad if you can't manage the rent on your new flat along with mortgage and such on this property.

Consider if you and your partner want to buy it together, or if only one of you should buy it. Relationships end, and once you have real estate involved, ending a relationship can get ugly. (Only thing worse are kids.) I don't know if you've been married 10 years, or just got together last month, but consider each of your individual interests as well as a couple, and make sure you have a plan in place in case you disagree about what should be done with the property, as well as how the money is split up if the flat is sold/rented.

  • Many thanks for your comment, really appreciated. As far as I know, the home report will include the works that are coming (but I can also ask my neighbours!). What I can say is that the mortgage advisor told me that the average of flat-for-sell viewings in the area is 78, which I guess is a really positive point. Also, the flats-for-rent are removing for websites in just 24/48h because of the high demand. If we go ahead, I guess the most reasonable thing to do is having a 35 years mortgage and make overpayments and remortgage, since we can actually pay per month around the double. Jul 13, 2019 at 19:08
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    An Edinburgh tenement flat may have higher maintenance costs, especially if it's listed, conservation or World Heritage area status, which can hugely inflate the cost of works. Single-family houses don't have to pay factor's fees either and don't have the problem of joint owners who don't pay their share. For letting the property in the future, Capital Gains Tax on any increase in value has to be considered, as well as income tax on the rental income less allowable expenses.
    – Owain
    Jul 14, 2019 at 13:13

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