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Clive Horobin

Cut price apartments - what's wrong with them?

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Hi,

Wondered what people's view is on this. In the spring of 2016 I started looking round for an apartment in Uxbridge. I found a nice apartment near the town centre at £360k and put in an offer on it that was accepted. The whole block of apartments was up for sale and occupied by sitting tenants. A company based in Ireland owned the apartment at the time I was due to buy it. My solicitor ran all the usual searches and checks and I had a survey and nothing untoward came up apart from needing chancel repair insurance, but that's not a big deal. The lease had  116 years left on it and the service charge was reasonable. I was due to exchange just after the 23rd June referendum and I decided to pull out at that point.

As far as I can gather, prices have if anything moved up in Hillingdon since the Brexit vote, so I was wrong to pull out on the grounds of a post-Brexit price reduction. However, it looks like I might have had a lucky escape in terms of the property itself, as I can see now in November that only one apartment has sold and the other 8 are still on the market.

The property was very nice and desirable in terms of design, and if anything it seemed a bargain at £360k. They were much nicer than most of the flats I've seen at a comparable price in the same area. In Outer London, the market is still pretty hot and there is obviously still a big shortage of property. Prices in Hillingdon have increased 16% over the last 12 months. So for 8 flats not to have sold there has to be something wrong with them. The one that did sell I checked on land registry website and it only sold for £320k, which is way below what you would expect for the area and type of property.

Since then, I've noticed that the biggest and most desirable apartment in the whole building has been reduced from £390k to £360k on the estate agent's website. Zoopla also records that when the flat was originally built in 2008 it sold for £450,000, and prices today are much higher than in 2008 so something is clearly wrong.

But I can't see what it is. On the face of it, these apartments are a huge bargain. But there must be something wrong.

From doing a bit of googling, I've also seen posts on this forum from anonymous tenants that are currently in the block saying that the property keeps changing hands and that is was owned by one company and then sold to another company shortly before the flats were put on the market in April 2016.

Any suggestions as to what could be going on?

Best wishes

Clive.

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Sheer guesswork, but my thoughts:

Does the company that owns the block own the freehold or a head lease?  If the latter is there a problem with the head lease?

Is there adequate financial provision for property maintenance?  Could there be a big service charge for owner occupiers on the way?

Are there any anti-social tenants in the block?

Maybe someone in Ireland needs the money sooner rather than later.

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My first thought was that they are probably simply unaffordable for too many people who'd be looking to buy in the area. 

Around here (SW London) a lot of newbuild flats have been reduced.  I dare say it has belatedly dawned on the developers that one bed flats at £600-700k, probably with high service charges and very little storage space, are not going to be 'snapped up' by   hordes of eager buyers. 

 

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