We are currently renting an apartment in London. Our landlord wants to sell the apartment. According to the real estate agent due to some heavy construction works on the external part of the building, it is currently not possible to get a mortgage on the apartments in the building. The works are likely to continue for about 2 years. Because of this, the owner of our apartment has drastically reduced the asking price. A very conservative estimate is that the current asking price is at least 20% below similar apartments in our area. We are now thinking of buying the apartment, as we could pay for it without taking a loan. We are anyway currently looking to buy something, even though normally we would look for something much bigger and finance it through a mortgage. Given our plan to start a family we probably would not live in the current apartment longer than 2 years. So what we could do is to buy it now and then after 2 years when the construction works are done sell it or rent it out.

The disadvantage of this would be that I need to lock up a large amount of my net worth in the apartment. Also we would have to continue living here for 2 years and deal with the construction noise and disturbance, but that seems acceptable for now. Of course it is always possible that the works will take much longer than estimated. On the positive side, this area here is quite nice, so it should not be a problem to find someone to rent the apartment. We could then take a buy-to-let mortgage when the works are done and use the capital released from this to buy a bigger house for us to live in. Unless there is a huge real estate crash, due to the attractive asking price the apartment should be worth more in two years than now, and even if the market is contracting we have a nice margin of safety.

Is there any mistake in my analysis? I have no experience with real estate investing, so possible I am too naive. What would you recommend given the information I have given you here?

3 Answers 3


Before you commit to buying the apartment, check who will be responsible for paying for the work on the outside of the building. It's usually shared between the owners of the apartments in the block.

That may be why the landlord is in a hurry to sell now. They may want rid of the place before a big bill arrives.


Ask yourself 'Why can't I get a mortgage due to the construction?'

I don't know about the specifics, but I assume it is because the bank considers property with such construction ongoing to be higher risk. Either because construction may fail, reducing value of your property, or something in that vein.

So if the bank considers it higher risk... should you? It doesn't seem that you are really considering this to be higher risk, and are looking at the 20% discount as a bit of a 'freebie'. Barring your specific situation (where you might want to move in 2 years anyway), are you sure a 20% discount is actually sufficient for the decreased property value you would be buying?

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    I would emphasize to OP that this really understates the case in London. The "deal" in question is in the "insanity" corner. Construction issues are intense there, mortgage issues are intense, leasehold issues are intense. I truly urge OP to run away.
    – Fattie
    Nov 27, 2020 at 13:39

Walk away, walk fast.

  1. A 20% rofl "discount" on some estimate is, literally, meaningless.

(When you sell a flat at auction in London, it's totally common that the price achieved will vary by far more than 20% one way or the other, a "20% discount" simply has no meaning. Note too that in London if you are paying cash ("OMG - WTF") the basic starting point of negotiations is way lower than that.)

  1. A property you cannot mortgage IS LITERALLY WORTH NOTHING. If you buy this, you LITERALLY, ACTUALLY LITERALLY, HAVE NOTHING.

  2. My guess is OP is from overseas or perhaps new to London real estate. If you asked 100 people who have owned 2+ flats in London, what they thought of this "deal", 100/100 would simply laugh and assume it's a joke.

This "deal" is so far from reality it can't even be taken seriously.

  • Thanks for the reply. This is very helpful. You are right i am from overseas and not familiar with London real estate.
    – Volwiz
    Nov 27, 2020 at 14:21
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    Oh my God. Run, don't walk. Get away from it. Get a MILE away from this.
    – Fattie
    Nov 27, 2020 at 14:27
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    If you don't want to "listen to some person on the internet". Please, in the name of God, seek advice from three property solicitors in London. They will more than happily advise for free initially. This is so far from reality that they will all just instantly tell you to walk away. Please take care!
    – Fattie
    Nov 27, 2020 at 14:29
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    @ben Think about it like this, putting yourselves in the shoes of your landlord: You've already paid for construction that will increase the value of your unit. You currently have a renter, meaning construction isn't even hitting your bottom line. Sooooo why would you give your renter a discount to buy the property from you? Why would they just give you free money like that? You are in a situation with 'informational asymmetry', meaning they have information you don't have. Meanwhile, they are aiming for a quick sale by dropping the price... does that make you worried about what they know? Nov 27, 2020 at 19:23
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    I think you're overdoing it with the hyperbole. There are plenty of properties that mortgage companies won't lend on that aren't "literally worth nothing". That's especially true of leasholds. A property with a lease that is less than about 70 years is a depreciating asset, and mortgage lenders won't touch it. But a buy-to-let investor with cash will still buy if the price is low enough. If they get their money back (with profits) in rent before the lease runs out, they are happy.
    – Simon B
    Nov 27, 2020 at 20:31

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