If you’re ready to put your flat on the market, there are a number of different considerations to make when selling an apartment over a house. This guide will detail these factors so that you can come to market fully informed on how to sell your flat.
If you own a flat, it’s most likely you own the leasehold rather than the freehold (meaning that while the flat is yours, the land it stands on belongs to the freeholder). Before you put your flat on the market, you should find out how long is left on your lease. This is because it will be very difficult for a buyer to get a mortgage on a property with a lease with fewer than 80 years remaining, and therefore will lower the price you can sell for. The time left on your lease should be in the information you got from your conveyancing solicitor when you bought your flat, otherwise you can get it from HM Land Registry for a fee.
If you find you only have a short amount of time left on your lease (fewer than 95 years), it’s a good idea to consider applying for an extension to avoid any negative impact on the asking price of your flat. There will be costs associated with this and it should be done via a legal professional so you will want to consider if the value you will get from the longer lease is worth it.
Alternatively, you can buy the freehold with other leaseholders in the building, through collective enfranchisement. This can make your flat more attractive to buyers as they will be exempt from ground rent and service charges, however maintenance of the grounds is now the freeholders’ responsibility. Again, a legal professional should be sought to oversee this.
Service Charges & Maintenance of Grounds
On the subject of maintenance, the condition of the grounds and communal areas of the building will impact the asking price of your apartment. While a low service charge may be attractive to some buyers, others might be put off if this translates into minimal maintenance of the building, resulting in it looking worn or untidy. A shabby looking building is likely to have a negative impact on the price you can ask for your flat.
At the higher end of the market, some buyers will be attracted to premium services such as a concierge, housekeeping services and communal facilities. If this applies to your flat, you will be able to market for a higher price but buyers will need to be clearly advised of the increased costs to live in the property.
Investors or owner occupiers as buyers
The profile of buyers in the market for your flat will vary depending on its location.
Investors are often attracted to city centre apartments, as these often present higher rental yield opportunities than suburban flats. In some rapidly growing city centre markets, competition from investors can push up asking prices for flats, meaning you can potentially sell your flat for considerably more than you paid. It can also be advantageous to sell to an investor, as they are often cash buyers. This means a sale can be completely relatively quickly because they’re not in a chain or applying for a mortgage, and they’re also not as risk of being denied a mortgage and the sale falling through.
On the other hand, selling to an investor may mean you get less for your apartment than if you sold it to someone planning on living in it themselves. If an investor is looking to ‘flip’ a property – that is, renovate it and sell at a profit – they will want to buy your flat for as little as they can. If your flat is looking a little tired, you may be better off spending some money on updating it yourself, and then selling it for a higher price later. Investors will also have little emotion on their purchase. They will often buy the property representing the best yield vs investment in time and money. Someone looking for their dream apartment to live in may be willing to pay a little extra to make that dream a reality.
The Legal Process
As with all sales you will need a Conveyancer to process the sale of your property. You should instruct this conveyancer early in the process and ensure you have things ready to present a draft contract to your buyer as soon as possible once a sale is agreed. Particularly you will want to pay attention to any restrictions on occupation that may be contained in your lease agreement as this may limit the buyers suitable for your property. You will also need to consider when you can apply for the management pack of information from your block managers. These cost money and can take time to produce so as early as possible in the sale is best to ensure no delays later down the line.
Ready to Sell Your Flat?
In summary, sellers need to make different considerations when selling an apartment over a house, from external influences on communal services and maintenance, to the types of buyers in the market, all of which impact the price you can market for. If you’re ready to sell your apartment, contact Chancellors today and we will help you get the best possible price for your property.