Concerns about buying apartments
Question from Ben updated on 29th August 2011:
Our expert Ben Turner responded:
The figures for the new ground rents are starting to come through on most buildings now so you should be able to get a really good idea of what the new ground rents might be before you buy. Selling is always easy if it’s at the right price, so make sure you buy at a good price.
Base your purchase price on the net return after the new ground rents come in to play and not on the fact that you like the smell of it or that the carpet matches the coffee table! As for capital gains, it is not just land that goes up with time, but the cost of building as well. If inflation is at 3%, then your apartment on leasehold land or not is going up by 3%. Your gain will actually be a lot more than just inflation because of other factors like location if you purchase right in the city centre.
Get independent advice from someone who knows about the building you are looking to buy in, and who is not trying to sell you something else.