Houses vs Flats - So many people get this wrong!

[@juandegalesdegales6491]

About 20 years ago I bought a flat and a house. Flat was “luxury flat with parking”. House was two bed terrace. House was £39.000 now valued at £225.000. Flat was £159.000 now valued at best £180.000. The reason being the service and ground rent of £3500 per annum plus knock on effects of Grenville.

[@Kamaltweet]

That is a really good point. The number of flats never work for me where I live and I get the same feeling as you mentioned when I try to run the numbers and consider the future and how they have performed in the past. They possibly work in the bigger cities like London, Manchester etc. However, I do think that Property Hub have a bias towards flats because they do a lot of off plan deal packaging which is mostly flats. This video and your comment has also convinced me stronger to not buy flats. May be one day the flat numbers will add up 🤷‍♂

[@sebluketravis2438]

Service charges in Manchester (Central) including ground rent are 2500 - 3000. Dummy money.

[@jonathanhowson6420]

Working as a building surveyor and working on a lot of section 20 projects I would never buy a flat.

[@ureshii99]

New build houses tend to come with service charges too for maintenance of grounds, lighting, gardening and liability insurance etc

[@andrewharrison3888]

We just purchased a new build house, the “service charge” is £140 pa. Extremely negligible and don’t hammer your yield and management company stress.

[@ureshii99]

@@andrewharrison3888 That amount is very reasonable. I have seen some nee build houses (not mansions) that have service charges in £Ks

[@ln5747]

My new build house (well 2007) has service charge of £35 a month. To me it's actually worth it because it maintains gardens and lighting etc in the development and gives it a more premium feel. Many of the new developments are completely soulless being paved and unlit.

[@Chrissyrozenot]

I am so glad the lease has now been explained. I found this missing in other videos and thought it misleads the viewers. Thanks for covering it. Banks don’t overlook this fact when potential buyers ask for mortgages.

[@thepropertysurgeon]

Love the channel but when thing I would contest is the service charge. This can be hugely flunctuant year upon year and dictated by which service company the management team signs up with and for what period. Furthermore currently in the UK there is no legal legislation to how much uou can charge tenants. The legal prerequisite is 'fair and reasonable' which is very subjective. LEASE is the government notified body who assists leaseholders with exponential rises in service charge but even this process is incredibly slow. I'm afraid service charges can instantly devalue the cost of a flat making the sale a painful process!

[@searklarak]

In London (due to its skyhigh costs), it's either a new build or a converted flat across any of the floors in a period conversion nowadays - even more difficult if you're purchasing alone without any support from your parents or relatives. A young, average earning Londoner like me is aware owning a big house would be unrealistic and wishful thinking sadly.

[@michaelstewart7577]

Such a great video and so informative. Keep up the great work!!!

[@truth.speaker]

Too right👍 Didn't know flats go up at the same rate as houses

[@annacomnena217]

Environmental regulations - EPC, high energy costs, heat pumps, pay per mile driving - are likely to undermine houses in the future. We're being nudged towards flats in city centres.

[@kevinu.k.7042]

Great Vlog. I would add that for flats it is good to get your solicitor to get the figures for the last five years ground rent (if any) and service charges as well as additional charges. This should show if the lessor is hiking them aggressively. As for the additional charges, not infrequently works like repainting the communal areas and refurbishing is charged by the management company, on top of the service charge by one off additional payments. It is worth knocking on a neighbours door and asking them what it's like to live there too. This might pick up on troublesome flat occupiers (excessive noise and antisocial behaviour), poor management services etc. Also ask about security. I would add that I had many happy years living in a flat and the lower price compared to a house got me onto the property ladder early. The only flats I am cautious of are those in converted houses. They have nothing like the sound proofing of purpose built flats. I write as someone who manages two blocks of flats for our group who collectively bought out the lease.

[@melanieah5501]

Are leaseholds being abolished?

[@kevinu.k.7042]

@@melanieah5501 There's been talk about it for some years now and the government keeps saying it will alter the law. As with many things they haven't acted on it. I doubt that they will simply be abolished. There is too much investment capital tied up in them. Though I think that despicable they are bought and held as investments in large part. They are also a source for milking leasees of funds. The fiscal shock to the system would be too great. My own thoughts are that the government with strengthen the rights to buy (which already exist) and eventually leases will wither on the vine. The actual lease is actually quite affordable. It's the legal costs which make it more expensive. Ground rents are more likely to be tackled first. They may well simply be abolished. It's a complicated area.

[@doug2279]

leases now is a good time to buy short lease stuff as seems like everybody wants to abolish it.

[@perolagrande]

I prefer houses by a country mile: you're renting to families who are more responsible than the singles/couples who rent flats, typically more mature and stable, so you have less churn and less damage to the property. Plus more independence as there are no communal areas that require a property company to manage, and bill you for. Houses are harder to come by for tenants (I calculated 80% of rentals available are flats), so you have a more prized and rare asset. I'd gladly accept a lower rental yield for less stress, risk and damage. I'm also not convinced that flats will outperform houses pricewise in the future. I'd guess the gap will only widen, with expensive high quality properties outperforming the low-end trash.

[@truth.speaker]

I dunno High interest rates have pushed people to buy up more flats The trite argument that "prices have gone up during the low interest years, so this tree is unstoppable and will go on forever" just seems impossible If ⅘ of rentals are flats, why is yield higher for them? Surely houses being rare should make them a better yielding asset? Why is it backwards? Maintenance costs either way. I'd rather do my own work, but either way I'm paying

[@wailomer7835]

You have a balanced view about flat vs houses. What do you think of new build flats in Manchester and Birmingham city centres. I tried to buy one in a skyscraper in Manchester from a reputable developer and I was told they’re sold out!

[@callumwindsor6516]

Love the videos an podcasts lads 💪🏼

[@ianh2389]

Often management companies use service charges as an excuse to print money.

[@MrSebastianBlake]

I worry that’s there’s a conflict of interest as you sell off plan flats property. If you service charges are 150 per month then after 10 years you’ve paid 18k Also I don’t think your being transparent about the exit with these flats unless your in Manchester or London flats typically lose there value so that to consider.

[@Paul-qg3iw]

This is very good and bona fide advice.

[@niteshbhatt5180]

Hello. A newcomer to the channel and would love the spreadsheet but the link doesn’t work anymore. Is there some way of getting the spreadsheet?

[@lookatcha]

I put an offer on a flat back in sept last year. Cash offer of £121,000 . Saleha is still not gone through which is truly unbelievable. I have reduced my offer two times from £121,000 to £118,000 to £116,000. Currently they state that everything is nearly done but then keep delaying things. I am so close to pulling out of the deal completely

[@Chrissyrozenot]

The more you show you want the flat the more they will drag you. I had this with a property where the landlord extended the house without permission and was “buying time” to get the permit and then sneakily increase the price . Theses are things that solicitors pinpoint. In your case I don’t know but maybe the owner is also looking for another place and hasn’t found it or, is also waiting like you. So many scenarios…

[@lookatcha]

@@Chrissyrozenot very true, it’s jjst so Damn frustrating. Given I’m a cash buyer, they should be the ones chasing me

[@rikardsaje]

I would look at other properties and if you see a good deal then just walk away from that one as it seems a bit strange.

[@cinemaipswich4636]

So the UK still has the "Landed Gentry", after all these centuries. Who in their right mind would buy a lease. They have no intrinsic value in themselves.

[@michaelscott231]

What a fabulous video! How can I download your spreadsheet ~ I don’t see it in the comments

[@PropertyHubUK]

Thank you so much! Here is a link to our free download tools propertyhub.net/tools

[@doug2279]

Freeholds went up so much more than flats after last few years maybe finally flats will be good especially as Gove wants better rights. Problem is for landlords there are so many restrictions on flats in leases along along with planning cases on change of uses being stricter with flats. Past performance is no guarantee of future results, and maybe now the time for flats with higher energy bills and finally space per square metre dropping to being similar or less than that of houses in many places.

[@MrGrumtastic]

I'm looking into hands-off property investment opportunities and have been factoring in letting agent fees to carry out the management of any properties. If I were to go with flats, would the service charge alleviate that requirement?

[@bobtheinvestor3735]

No a service charge on flats wouldn’t alleviate the need for letting agent management of a flat. If you want a hands off property investment I suggest you look at REITs

[@davidfolley4524]

Where is the calculation link?

[@keirdoubas]

what happened to the link about how you're as hands off as possible rob?

[@zeemughal2942]

Hi do you have full courses step by step guide how to get into property

[@PropertyHubUK]

Hi! While we don't offer a specific course on how to get into property, we do have the Property Hub University where we cover various relevant topics. You can find valuable information and insights in our Property Hub University playlist. Feel free to check it out here: kzbin.info/aero/PLr8ktrqqQCgjEv2Q0_RoUG_zz4ZUZjOfG

[@onuakpala5172]

Where is the link to download

[@PropertyHubUK]

Here is a link to our free download tools propertyhub.net/tools