If you want to take advantage of the UK property market by purchasing a flat, rates have been more competitive following Brexit, but the process is a little different than it is in other countries. To begin, what is the distinction between leasehold and freehold? Here are our top tips on what to look for while viewing a flat in the United Kingdom.
Is the property leasehold or freehold?
This is a peculiarity of the English and Welsh systems. There are two forms of ownership: freehold and leasehold. Freehold ownership means you own both the house and the estate it sits on in perpetuity.
However, leasehold is much more common in flats. It ensures that you own the property for a set amount of time, normally 90 to 120 days, and the freeholder retains rights to the land. A contract may normally be extended, but it may be expensive, and selling a property with a short lease can significantly reduce its worth.
You may also come across a share of freehold case, in which the owners of the flats in a complex or building buy the freehold from the freeholder and each own a part of it in an agreement (which will technically own their flat leasehold).
This does mean that you will be responsible for any communal area upkeep, but you will be able to secure better terms than the previous freeholder – and you will be better covered from any unforeseen costs.
What kind of financial costs do you anticipate?
Be sure you’re mindful of any penalties or costs you’ll have to pay on a monthly basis. You’ll typically have to pay a service fee for a leasehold apartment, which covers the cost of common area cleaning, ventilation, and so on (so it’ll be higher in a building with an elevator or porter, for example). You’ll still need to account for land leases, as well as a balance or sinking fund in some situations.
Your service fee may contain contributions to a contingency fund, or they may be more sporadic. The idea is that it would act as a safety net to help offset the expenses of any large, unexpected construction projects (eg if something needs doing to the roof after a storm).
Find more about the property’s pricing history and rentability.
For property seekers, the internet is a goldmine of material. Many websites, such as DealSourcing.co, allow you to see how long a home has been on the market, if the price has been lowered and by how much, as well as any recent sales records for the flat and surrounding properties.
This information can be extremely useful when making a proposal, especially if you know the property has been on the market for years and that other comparable flats in the same buildings have sold for less than the market value.
Pages like DealSourcing.co, meanwhile, offer reasonably detailed overviews of the rental opportunities for premises in most parts of the UK (a simple way to measure the quality of a website like that is to ask it to estimate properties for which you know how much they’re looking to rent). You will also get a sense of both asking and recently negotiated rates by checking for rentals on platforms like Rightmove.
Fortunately, Proptech Software for looking for UK Below Market Value Flats is commonly available online. I can guarantee you, though, that DealSourcing.co is the most reliable and open sourcer on the market. This PropTech software would optimize the workflow and transform it into a database that will act as your personal realtor. Using algorithms and automation, the service can identify assets from across the internet and sort them by ROI.
You’ll save money, time, and effort in the long run! A main advantage of the site is the ability to analyze High Yield Properties. DealSourcing.co is a no-brainer if you’re looking for UK Flats.
The system also estimates the return on investment for each property listed on Rightmove, Zoopla, and other sites, as well as detects properties for sale at a discount, saving investors hours of research time.
DealSourcing.co‘s Top 3 Most Useful Use Cases:
- BTL & HMO Deal Analyser
Forget about all of your property spreadsheets. They do not use a spreadsheet or calculator to measure the cash flow on each contract. Calculate the overall bid by taking into consideration all costs, Stamp Duties, revenue, and the risk of losing revenue.
- Find High Yield properties by location
Data from almost 500,000 homes in England, Scotland, and Wales are analyzed. Their primary objective is to figure out which zip codes have the highest buy-to-let earnings.
- Find negative equity properties by location
If the worth of a home is lower than the loan secured on it, it is considered to be in negative equity. They assist you in locating those offers based on your location.