Whether you are consider buying a property to move into, or investing in a buy-to-let, there may be a number of reasons why you will want to know whether the property is, or used to be, owned by the local authority. So how do you find out?
There are two ways to determine whether a house or flat is ex council (Local Authority). If the property is for sale, the estate agent will have details on the history of the property. If the property is not for sale, you can purchase a copy of the title deed from Land Registry for a small fee.
The title deed will identify the current freeholder and whether or not it was once owned by the local authority. You can purchase a copy of any title deed at gov.uk/search-property-information-land-registry.
If you would like to know how many properties are owned by the local authority within a given postcode, and how many are privately owned, you can search this for free by visiting streetcheck.co.uk.
After entering a postcode you simply need to look for the ‘Housing Tenure’ section. Here is an example of Winchcombe Road in Portsmouth:
StreetCheck also provides other useful information that will be helpful to you when making a purchasing decision, especially if you are considering investing in a buy-to-let property, including:
- Demographic Information
- Sale Prices (linked to Land Registry)
- Housing Types
- Housing Occupancy
- Economic Activity
- Employment Industry
- And more …
Advantages Of Purchasing An Ex Council Property
Council properties are often located in convenient areas with bigger rooms and more outside space compared to similar property types within the same area which have been built by a private developer. In general, buyers tend to get more for their money when purchasing ex council properties.
Also, the construction of council properties in most cases are of high quality, as local authorities did not want to be burdened with ongoing maintenance costs once they were tenanted.
The fixtures and fittings that were initially installed e.g. kitchen and bathroom, may have been considered basic to some, but they still provided good, safe and comfortable accommodation for families.
Disadvantages Of Purchasing An Ex Council Property
Council properties generally do not have the curb appeal that privately built properties have. Although most were built to last, there are some that were erected quickly post World War 2 using pre-cast reinforced concrete and a steel frame, which are classed as ‘non-standard construction’.
Although they were fit for purpose at the time, they are not energy efficient by today’s standards without undergoing extensive alterations. The thought of high energy bills or expensive works to improve the energy efficiency, is not appealing to most buyers.
Essentially, council estates are built to provide good affordable housing and are not necessarily designed to look aesthetically pleasing, when you compare them to privately built estates, which leads me to the last disadvantage.
For some people, there is also a stigma attached to council properties as they are initially occupied by low income households or people that cannot, or do not, work. This can sometimes lead to a neglectful look as some residents often don’t have enough disposal income to spend on the maintenance and upkeep of the outside areas.
For these reasons, some property buyers and investors often have concerns or think twice before deciding to proceed with the purchase of an ex local authority property.
Can You Get A Mortgage On An Ex Council House Or Flat?
There are many mortgage lenders, who in principle, would consider lending on ex council houses and flats. Similar to any property, the construction, location and saleability are just a few of the factors that would be taken into consideration when determining whether a mortgage would be approved.
Ex local authority flats tend to have tighter constraints compared to houses though. Lenders will want to know which floor the flat is situated, how many other flats in the block are privately owned, and they will check to ensure that the entire block and surrounding grounds have been well maintained by the freeholder.
Loan-to-value (LTV) may also be lower with some mortgage lenders to help protect themselves from falls in property prices. As an example, a lender may offer an 80% LTV on privately built houses, but may only offer a 70% LTV on an ex council house.
With the additional concerns and constraints that are imposed with purchasing any flat, LTV’s may only be as high as 60% if the property is ex council.
The prefab and pre-cast reinforced concrete properties which are classed as non-standard construction, will not be mortgageable and can therefore only be purchased with cash. Buyers could make alterations to the property after the purchase to improve the structure and energy efficiency, and then apply for a mortgage once the work is complete.
My Experience With Purchasing An Ex Council House
As I write this, I have only purchased one ex council house as a buy-to-let, and it is one of the best property investments I have made. In the 17 years I have owned it, I have only had 6 to 8 weeks of voids and 4 of those weeks were due to the negligence of a high street letting agent which I duly let go.
It was my second property investment, and I remember not being too keen when I first viewed it, as I felt it didn’t have the ‘curb appeal’ that my first investment had. But I listened to the advice of the mortgage broker whom worked for the estate agent, who pointed out that the house was located close to the university and that it would be an ideal rental for students.
It’s difficult to remember that far back, but the purchase process didn’t appear to be any more complicated than purchasing my first investment.
I do remember that the mortgage broker applied to a different lender. But that doesn’t necessarily mean it was because the property was ex local authority, as lenders change their rates and conditions regularly and for a number of reasons. The terms, conditions and rates I was offered by the new lender suited my needs at the time.
The house is standard construction, solid and has had no structural issues at all. It’s located approximately 1 mile from the city centre and about 50 meters from the nearest bus stop. I purchased it for £169,950 in 2004 and its estimated value is now £340,000, although I have no intention of selling.
Would I consider purchasing another ex council property? Absolutely yes!