Sullivan Court in Fulham
When Margaret Thatcher decided to sell off huge swathes of local authority property back in the Eighties she added close to two million new homes to the country's private housing stock - everything from brick terraces and semis to the highest of post-war tower blocks.
Since then, even accounting for recent house price declines, many people are still priced out of the rest of the market, but may find that ex-local authority properties are an affordable option.
However, if caveat emptor (buyer beware) is the order of the day for any property purchase, the Latin tag is doubly relevant in this sector of the market.
Do your homework and you really can snap up a roomy and well-located bargain; choose badly and you may make one of the worst financial decisions of your life.
Below is a guide to the plus points you should look for, and the pitfalls you should try to avoid.
Broken Lifts: Why Buy?
Petticoat Towers, London E1
Ask most people what they think of your average inner-city council estate and they'll probably conjure up a desolate world of broken lifts, boarded up windows, and empty wind-swept spaces strewn with litter.
Sadly, some council property developments conform to the stereotype, but many don't. Sceptical? Well, consider this: reputable estate agents don't like to wear out expensive shoe leather climbing up dingy stairwells, but even the best of them can be found selling ex-council properties.
Take Dan McLeod of Atkinson McLeod, a swish central London agency that deals in the City and Canary Wharf. Dan is a fan of good ex-local authority developments and offers four reasons for giving them some serious consideration:
Petticoat Towers, London E1
1. Price: They are far more affordable than privately developed properties, and are a perfect step onto the housing ladder for first-time buyers.
2. Space: They are better value, in that you often get a lot more space for your money (whether you're buying or renting).
3. Build: Many are far better built than the typical private development, with thicker walls and better layouts.
4. Location: In many cases, they can allow you to move to places - Zone 1 in London, for example - you would otherwise not be able to afford, which can be vital for many City/Urban workers.
Petticoat Towers, London E1
These are all good points, and if you get the right property in the right place you're on to a winner. But as Dan explains, the trick is to steer clear of the dodgier end of the market:
"There are key issues to focus on - where is the property, how high is it, how well has it been maintained, the level of owner-occupation, who currently owns and manages it, the material it was built in, and in some cases, who built it".
Just so - with these caveats in mind, here's a run through the main things to consider when looking for an ex-local authority bargain.
Buying: Prices
South Quay, Wapping
Property prices present the most compelling reason for buying an ex-local authority property. They're not just cheaper, they're often massively so.
Some examples:Dan McLeod says a new build two-bed flat in Wapping will set you back £310-320,000. But a typical ex-local authority flat in the same area, close to Liverpool Street station, will cost just £170,000.
"In Wapping," he adds, "a two-bed flat in a warehouse conversion will cost you around £325,000, but in a really good ex-local authority building it will cost you around £220-240,000."
You'll notice a difference here - £170,000 for a typical ex-local authority property and £220-240,000 for a really good one. Two factors, says Dan, determine that price differential:
Petticoat Towers, London E1
"A flat in a tower in a high-rise ex-local authority block is normally a no-no - usually, I'd say don't go above five floors because it will be difficult to get a loan. But there are towers and towers.
"In E1, for example, Petticoat Towers is a concrete high-rise but it was built by the Corporation of London - the same people who built the Barbican, and that makes all the difference. It also has a high level of owner-occupation.
"Similarly, in South Quay Estate, Wapping, a two-bed flat will cost around £250,000 whereas a two-bed in a new-build development will cost over £400,000. "South Quay is more expensive than some ex-local authority developments for several reasons - it's low-rise, on the river, it's in a prime location, it's self-managing and it's almost 100 per cent owner-occupied.
"Price, in effect, can vary according to the nature of the building, the levels of ownership, and the location of the property - but even the very best of ex-council developments will be cheaper than new-builds or warehouse conversions."
Buying: Places & Prime Developments
Churchill Gardens, SW11
Dauntons, Tel: 020 7834 8000
As these examples make clear, there's an art to picking a good ex-local authority property. Location, as with any purchase, is crucial - and with ex-local authority developments there are some real gems to be had.
Stephen Ludlow of Ludlow Thompson, which sells a lot of ex-council stock, says: "Some developments are wonderfully located. The council estate of Sullivan Court in SW6 sits snugly at the heart of Fulham, the home of the green wellies and Range Rover set.
"Millbank Estate in Pimlico is no more than a brush stroke away from the Tate Gallery. Swedenburgh Gardens, Cable Street SW1 lies on the edge of the City, and Esher Gardens SW18 is next to Wimbledon Common."
But if location is crucial, so too is the reputation of the development. In London, some of the best local authority schemes were built by top architects who had a genuine appreciation of modernist principles - the following are real classics:
Churchill Gardens, SW11
Dauntons, Tel: 020 7834 8000
Churchill Gardens in Pimlico, designed by Powell & Moya: Recently won a Civic Trust award and is still a popular and well-functioning estate set in attractive gardens. Six blocks are listed.
Trellick Tower in Ladbroke Grove, designed by Arno Goldfinger: Long reviled as a brutalist carbuncle, but now regarded as a modernist icon – it still houses many local authority residents, but when flats come on the open market they fetch high prices.
The Alton Estate, Roehampton: Designed by London County Council architects and now Grade II listed. Nice location, with views over Richmond Park.
The Sydenham Hill Estate, SE26: Built by the Corporation of London in the 50s – there are two estates, Lammas Green and Otto Close. Parts are now Grade II listed and popular with buyers.
All of these developments, to some extent, are exceptions - but they do usefully illustrate an important point about ex-local authority property: it's not a monolithic market.
Most buyers, of course, may not get the chance to buy in a highly rated architectural treasure, so the name of the game is choosing carefully from the rest of what's available - which leads us to:
Buying: Buildings & Finance
Millbank Estate, SW1
Andrew Reeves, Tel: 020 7881 1366
In 1968 Ronan Point, a 23-storey block of flats in Newham, East London, collapsed following a gas explosion. Four people were killed and the backlash against high-rise tower blocks dealt a serious blow to the utopianism of modernist social housing schemes.
Unlike the earlier council developments designed by top-notch architects, Ronan Point was a cheap system-built structure - basically an engineered, prefabricated solution to an increasingly cash-strapped social housing project.
A lot of system-built estates were built - and quite a few have since been blown up to much rejoicing. But there are still examples out there, and they should be avoided like the plague.
Wood Green, N22
Hane, Tel: 020 8342 9858
Basically, if you're buying an ex-local authority property go for low rise brick-built developments or concrete structures in well-regarded and established schemes - indeed, in many cases you'll have no choice since lenders won't finance you.
Ray Boulger of Charcol explains: "Many lenders will have a ban on all flats and others won't consider anything in a tower block above a certain number of storeys, usually four, five or six.
"Whether you're buying on the ground floor or the top is irrelevant. It's the number of floors in the whole building that will be important. And concrete is also a problem, mainly because some Sixties blocks were made from substandard material and have not weathered well.
Off The Roundway, N17
Cousins, Tel: 020 8340 8240
"There are exceptions, of course. If it's in a good location, of good quality (though brick is generally best) and there is clearly strong demand, lenders won't have a problem (eg: the Barbican).
"Lenders also consider the percentage of owner-occupiers in a block or an estate. More than 50 per cent council tenants is a big negative because the perception is that owners look after properties more carefully. Also, when it comes to re-selling, it might be less desirable."
Lenders who do consider ex-local authority include: Ecology Building Society (Tel: 0845 674 5566) Norwich and Peterborough and Buildstore (Tel:0870 870 9991).
Buying: Tenure and Maintenance
Falmouth Rd, SE1
Field & Sons, Tel: 020 7840 0666
Now this really is a big one, so listen up. If you buy an ex-local authority house you'll probably be the freeholder - but if you buy a flat the council will probably be the freeholder.
That makes all the difference for two reasons: first, service charges; second, maintenance costs. Service charges on council run developments are often competitive relative to new-build developments.
However, it's important to check what exactly the charge covers - ask to see previous service charge bills and ask current residents, or the residents' association, whether the place is well run.
Remember too that service charges generally don't cover major maintenance and renovation work. This is becoming a big issue because the government has ordered councils to improve their properties to a designated level by 2010.
Walworth
Field & Sons, Tel: 020 7840 0666
This can be a major headache, and a financial nightmare, for private buyers. In London there are currently many examples of leaseholders being handed crippling bills - up to £60,000 - to fund roof repairs or lift replacement.
So before you buy, it's crucial to find out what kind of work is scheduled and what your liability will be - your solicitor should do this as part of the conveyancing process.
Lastly, on the question of tenure, find out how long is left on the lease, whether an extension is possible and whether there are any plans for the introduction of right to manage.
The more social tenants, the less likely these will be - though it does happen. "The South Quay development," says Dan McLeod, "is now almost 100 per cent owner-occupiers and it's self-managing, which adds to the value of the properties."
Case History: Smart Buy
Mohammed Daood's flat
Crowder Street, E1
If that all sounds daunting, don't be put off. Do your homework, tread carefully and you can get a cut-price home in an excellent location. Mohammed Daood, who works for The Times in Wapping, recently bought a flat through Atkinson McLoed in Crowder Street, E1.
"I chose this because it was more spacious and more solidly constructed than many of the new-build developments looked at. The service charges are also much lower and it's in a great location.
"The building is brick-built and only four storeys high so I had no problem with the financing. The lease is over 100 years and extension is possible. There is renovation work scheduled but it's mainly small scale and cosmetic.
Crowder Street, E1
Sold by Atkinson McLeod
Tel: 020 7488 5544
"The roof has already been done and there's no lift.
"The block has a high percentage of owner-occupiers and there are plans to hand it over to a management company next year.
"True, it's not exactly eye candy, but it's a pleasant place to live and I don't think I'll have any problem at all selling it on.
"There's high demand in Wapping and with the Olympics around the corner I think it will increase in value."
Ex-Council: Top Tips
1. They Vary
From modernist classics to system-built horrors - this is not a monolithic market. The more they look like a typical council property the cheaper they will usually be.
2. Choose Carefully
Low-rise (under five storeys) brick-built developments, and those in good locations, are the best bet.
3. Mortgages
Lenders usually avoid high-rise schemes (over five storeys), system-built blocks, deck access, and developments with low levels (below 50 per cent) of owner-occupation.
4. Buy-To-Let
A good bet, in the right location. You can often charge 80 per cent of a period property's rent, for a property which cost half the price.
5. Property Lease Issues
Check how long the lease is, and whether it can be extended.
6. Service Charges
Check what exactly the charge covers - ask to see previous service charge bills and ask current residents, or the residents' association, whether the place is well run.
7. New Roof?
Service charges generally don't cover major maintenance and renovation work. Find out if any big work is in the pipeline and what your liability will be - some owners are being stung for bills of £50,000 and more.
8. Recession Proof?
When the market is strong people look on the margins for an affordable home. But when it slows down they can be more difficult to sell, so you need to proceed with great care when buying these properties.
Michael O'Flynn
© Find A Property 2000-2009
