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Buying a leasehold London flat seems out of fashion. With the Covid rush to houses — which offered more space and a garden — prices surged ahead of flats, which are often associated with high service charges, gnarly legislation and legal hazards. As a buying agent, I’m often asked whether buying a flat in London is still worth it.
Sometimes, yes. If you only need a London pied-à-terre several times a year, a flat still wins hands down for security, maintenance and a concierge. And even for those with big budgets, flats are the only option for many of central London’s coolest neighbourhoods — excepting the odd mews house (in Marylebone, for example). Flats also remain the entry route for many on to the property ladder.
And houses aren’t always the right choice. One client I spoke to recently is lamenting the high maintenance costs, and worries his house is not secure enough when he is abroad. He’s planning to sell it and buy a flat, stumping up at least £1mn in stamp duty; it has been an expensive mistake.
Due diligence on flats has become harder, true. But here are some ways to navigate the path.
Don’t celebrate the Leasehold and Freehold Reform Act 2024 quite yet. It should be a boost for London flats, promising to make lease extensions quicker, cheaper and more likely. But much of it is being challenged in the courts (by London landowners including Cadogan Estates and Grosvenor Estate), a process that could take years to resolve. In the meantime, key pillars — including abolishing the marriage value calculation that increases the cost of shorter leases, caps on annual ground rent and exempting leaseholders from paying freeholder costs — can’t be enforced.
Until the questions are settled, there’s a risk of overpaying for a home with a short lease. There’s no point in snapping up what seems on the face of it to be a good deal, only to find when you add on the cost of extending the lease the resale value is less than you’ve spent. A good surveyor is vital when preparing an offer.
Scrutinise the service charges. Distinguish genuine increases — we’re all paying more for our heating and maintenance — from unjustified ones, by investigating the past three years of accounts which the vendor or managing agent should provide (if you’re buying the home they must, as part of the conveyancing process). Check early that there is a reserve fund to cover future work, and look out for peeling paint, worn carpets, crumbling facades or anything that suggests the building isn’t being looked after. Are the managing agents cagey or do they seem competent?
Be mindful of refurbs. After the Grenfell tragedy the 2022 Building Safety Act (BSA) was passed to protect occupants of tall buildings (more than five storeys or 11 metres — most Victorian terrace flats are shorter). Its major teething problems are well documented.
Less publicised are the new rules around refurbishments of tired period flats in prime central London. So much of the city has these lovely tall mansion blocks, with flats calling out for renovation. But if they’re more than six storeys or 18 metres, they are deemed a “high risk building”, facing tough rules. Any significant work needs approval from a new Building Safety Regulator (BSR), but currently getting these approvals is extremely tricky.
Building safety experts are in short supply, meaning potential delays. The BSR is swamped with requests and frequently asks for more information, further slowing things down. One of our clients is seven months in, tens of thousands of pounds down in consultant and application fees, and still without approval. He hoped to have moved in by now; instead, he is in limbo paying a huge mortgage and service charge every month for a home he can’t live in.
Another obstacle for those planning renovations comes from leases with “absolute prohibition” against works — still common in Mayfair and other parts of Westminster. Historically, landlords got around these, granting permission for alterations in exchange for a fee from the leaseholder. But after a landlord in Maida Vale was successfully sued for this by another leaseholder in the block in 2020, many of the larger landlords in central London are simply saying no.
We still hear of buyers trying their luck — buying a flat then approaching their neighbours informally to persuade them not to object. But this is risky: don’t buy a flat assuming you’ll succeed — especially in a big block with lots of neighbours.
A solicitor will spot the absolute prohibition clause — ensure they have had a chance to, before spending £3,000 on a building survey.
A good planning consultant can be worth their weight in gold. Buying adjacent flats in a building then combining them was once a great way to create a large high-end lateral apartment. But today, councils are desperate not to reduce the number of housing units. Since last July, “amalgamation” has become nearly impossible in Kensington and Chelsea — Westminster has also cracked down. In both boroughs, we often see sellers and selling agents claiming it is still possible.
Restrictions can be circumvented, however, such as when you’re improving the housing supply by creating a family-sized home, or if the units are substandard — badly ventilated, say, or lacking daylight. Where the property is listed and you’re returning it to its original plan, that could work, too. (Meanwhile, if you own adjoining properties with existing permission, or that are combined, your home could be more valuable if it’s in a “high risk building”.)
Be brave, be prepared. Don’t desert the classic London flat. They may well still be the only option to live where you want, and their current unpopularity means there remain real finds out there. Just hold your nerve.
Chloe Leefe is director of Aykroyd & Co buying agents
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