Mortgages For High Rise Flats

What is classed as a new build flat?

New build flats are generally defined as property that has been built, converted or refurbished in the last 2 years. This can also include properties being bought off plan

What is classed as a high rise flat?

Definition varies from lender to lender, some describe high rise as 4 storeys, some 6. Some have restrictions stating the block can’t be more than 8 or 10 storeys high and there is a requirement for a lift

Is it worth buying a new build flat? What are the advantages and disadvantages?

New build flats are generally more expensive initially and suffer a depreciation from the inflated initial value so it may take a while for them to increase in value, however they have lower maintenance costs initially, are covered by warranty (usually NHBC) and are more energy efficient. They retain their value well and can often come with incentives such as new kitchens etc, however it depends on the developer as to the standard of the new property. If you intend to remain in the property for a while they are certainly a good option.

Why won’t my flat sell?

In many areas overbuilding of flats has led to a saturated market where supply outstrips demand. In some instances the concentration of client in the building can impact the saleability of a flat, for example if the percentage of residential homeowners in the building is too low this would affect saleability and the ability to obtain a mortgage on a flat. It is also worth checking the terms and conditions on your lease and how many years left there are on it, as if lenders deem a lease “onerous” they won’t lend on a property.

Are flats a good investment?

Flats are often cheaper, making them an easier first step on the property ladder or first investment property. They make great homes, are often more energy efficient and can return a good rental yield. However there are additional costs such as ground rent and service charge which will need to be factored in when considering if flats are a profitable investment.

What should buyers be aware of when buying a leasehold flat?

This is especially pertinent as most flats are leasehold and it is very difficult to obtain a mortgage on a freehold flat. The first thing to consider is the length of the lease. If the lease is considered short (generally under 85 years remaining) it can be difficult to renew and lenders are reluctant to lend in these instances. Similarly it is worth bearing in mind the terms of the lease. If lenders deem it onerous they may refuse to lend and it is worth noting what provisions the freeholder has to increase ground rent and service charge.