Should I buy a tiny, less-than-ideal flat?

[wafter]

As many of you will know from my incessant bleating, I'm currently (at north of 40) living with my mother post-long-term-relationship-collapse, and dreaming of buying a flat in Oxford so that I might return to the simple, low-outgoing, cycle-centric lifestyle I crave to maintain my mental and physical health.

I'm lucky enough to have a reasonable deposit (thanks to years of saving and a not insubstantial contribution from the old dear) and have been watching the market for years. Recently (thanks to failling prices / changing sentiment / gradually growing savings) my goal has seemed increasingly achievable; if always a stretch.

A while ago I viewed a flat that's been on the market for ages. Decent part of town (if far out), secluded, small development.. on the down-side it's tiny (37m^2) with minimal storage space, has electric heating and seems very well shaded so I suspect would be quite cold and dark.

I declined to make an offer on it as I decided it was a bit too compromised and I'd subsequently seen something else that looked like a better bet (if more money so a stretch). I made an offer on the latter flat and had it rejected, since another party has apparently offered more. I'm on the fence as to how to proceed as I could potentially offer more myself, but it'd been debt up to the eyeballs and burning my intended slush fund; leaving me open to a fair amount of risk...

Back to the original flat - if I could get it for what I think is a fair price (a lot less than asking and funnily enough about the same figure the agent reckoned it was actually worth) I'd need a tiny mortgage, so I'd largely avoid all the potential risk of debt exposure in the current climate.

On the one hand I'm desperate to move out and it doesn't seem utterly terrible, even if it's tiny. On the other I worry about space, energy costs and the lack of sunlight. When I move it really needs to be somewhere I'm going to be happy being for the long haul as I earn sod all so will struggle to save once I've moved out. If I wanted to move after buying it would incur all the usual costs all over again.. plus might expose me to stamp duty depending on how government policy pans out in future.

As it stands other than my spiralling mental health / in practical terms there's an argument for sitting on my hands as flat prices in the city have been slowly drifting down for years, while the wider market is taking a hammering and while at home I can save a reasonable amount each month. That said, stuff is still selling (if slowly / at less than asking), much coming to market appears to be the dregs of ex-BTL property and who's to say what will happen to the wider market in time.

This is really no fun as it's all on me since I'm buying on my own and I'm crap at making decisions at the best of times, so I'd be interested to hear what people reckon..

Ta

 

[ClichéGuevara]

A while ago I viewed a flat that's been on the market for ages.

Ta

Have you considered why that could be?

 

[Grant Fondo]

so I'd be interested to hear what people reckon..

I would go for it. Might be small but it's your own space to make of as you wish.
I lived in Oxford for six years and loved it, all rented when property was relatively cheap to buy. Ended up sharing a big victorian one in Summertown (these go for £3.5m and up now!) but great memories.
Prices will no doubt start rising again in Oxford so maybe nows a good time. Best of luck

 

[wafter]

Have you considered why that could be?

I think largely because they're asking massively more than it's worth. It's currently owned by a landlord and rented out; the property was bought by them at the peak of the flat / BTL bubble in 2016 and will have been depreciating ever since. It initially went on (a couple of years ago) for about 7% more than it sold for in 2016.

Current asking is a shade less than it sold for previously (and it's gone lower in the past before being pulled); both myself and the agent have (independently) reached the conclusion that a realistic figure is about 20-25% less than the current asking.. which I think is achievable as for once the agent's agenda is largely aligned with my own (i.e. they want it gone).

Of course on top of that there are the issues that I've already mentioned (floorspace, light, energy cost) which of course matter to anyone actually living there, but not if you're just farming it out for profit with little concern for those paying for the privilege.

 

[wafter]

I would go for it. Might be small but it's your own space to make of as you wish.
I lived in Oxford for six years and loved it, all rented when property was relatively cheap to buy. Ended up sharing a big victorian one in Summertown (these go for £3.5m and up now!) but great memories.
Prices will no doubt start rising again in Oxford so maybe nows a good time. Best of luck

Thanks - no need to up-sell the place to me as my desire to move back is a given; although I think the city has gone down hill somewhat in recent years (although to be fair where hasn't?).

It's not so utterly terrible that I'd dismissed it out of hand (like most of what I could technically afford, tbh), however it does seem very compromised and I'm not sure that I could be happy there. On the one hand it would be great to get the situation sorted / get back to the city and get on with life; on the other this is my one shot that I've been waiting for for so long and I don't want to cock it up.

The potential energy cost also concerns me; with leccy being a lot more than gas I'm aware that I'll be paying more to heat and light the place; which could potentially have gone towards a mortgage on a bigger / nicer property.

I did consider going in really low on the asking, but want to keep the agents on-side as they typically manage most of the stuff at the bottom end of the market so I don't want them to write me off as a time waster..

 

[vickster]

I’d possibly hang fire as prices are going down?

 

[Bonefish Blues]

Head vs heart, as always in these scenarios. I reckon, as you do, that Oxford's got a little bit more price drift to come, and property's sticking, and not moving as it usually does at the moment. If you're going to be there for a while, then hold out for something closer to what you'd be happy with long term, I'd say.

 

[wafter]

I’d possibly hang fire as prices are going down?

Head vs heart, as always in these scenarios. I reckon, as you do, that Oxford's got a little bit more price drift to come, and property's sticking, and not moving as it usually does at the moment. If you're going to be there for a while, then hold out for something closer to what you'd be happy with long term, I'd say.

Thanks both - it's great to hear this from someone else as this is really what my gut tells me too.. although as always I'm riddled with FOMO. As above flats have been gently drifting down for 7yrs now while the falls in the wider market / the underlying driving factors don't show any signs of abating so I can certainly see things falling further in the short term.

The slight sticking point is that I have a fairly specific set of criteria (such as ideally direct, ground-floor access so I can keep my nicer bikes inside) which rules out a lot; along with all the other usual factors such as leasehold length / status, property condition, service charges, location, crime rate etc..

In addition there aren't a lot of 1-bed flats in the area I'd like..

 

[Julia9054]

Could you rent until you find the right property to buy? Would get you back your independence and put you in the area you want to be

 

[Fastpedaller]

I had a small flat 30 years ago - It was very bad for my mental health. The £300 annual maintenance charge seemed ok when I took it on - the 'extraordinary event' of painting the flats arrived a couple of years later, and they wanted 2k from each of us, and the annual charge had gone to £500 as well. It was rapidly becoming a money pit over which we all (the residents of only 24 flats) had no control. So I wouldn't want anything leasehold again. We had no support from the mortgage providers and we were being royally ripped off - eventually I handed the keys to the Bank!. I know my reaction is extreme, and maybe not typical, but I'd suggest you look at all costs involved - the oft-quoted 'ground rent' seems to be the focus of many, but is generally a 'peppercorn rent' of a few pounds a year, which is generally fixed forever - it's the spiralling maintenance costs and any 'extraordinary' ones like a roof 'needs replacing' (even if it doesn't?) or (in the case of many hi-rise ones) which have been given bills for £many thousands to remove cladding which they probably paid to be installed in the first place.

 

[T4tomo]

Well the minimal storage isn't much of a downside, as you can store stuff at your mothers I assume?

heating system ca be changed, but at a cost. although bear in mind flats are much cheaper to heat than houses as your neighbours are keeping the floor and ceiling warm for you!

Obviously you need somewhere to store your bike(s)

Light is important to the feel of a place, you need a place somewhere in the flat where you can sit and be happy. location / neighbourhood is also important

When I moved post divorce the house was a compromise, but then I had to move and it was the best I'd seen, and I had a cracking man cave / bike shed built in the garden which overcame some of the lack of storage issues.

You at least have the luxury of biding your time at your mothers.

There is always demand for property in oxford, because of the size of the city, amount of students etc. so whilst you might not buy at the bottom of the dip, you aren't going to be left with a lemon.

ultimately its your decision but those are some thoughts....

 

[Bonefish Blues]

The slight sticking point is that I have a fairly specific set of criteria (such as ideally direct, ground-floor access so I can keep my nicer bikes inside) which rules out a lot; along with all the other usual factors such as leasehold length / status, property condition, service charges, location, crime rate etc..

In addition there aren't a lot of 1-bed flats in the area I'd like..

Be the best friend of the Oxford agents who handle this part of the market - establish you're a serious cash buyer, make sure they know what you're looking for and keep in touch. The right one will come along. Agents love a quick turn-round.

 

[vickster]

and if happy with such an approach, keep an eye on private sales and online sites. Have a good conveyancing solicitor & surveyor ready

 

[cyberknight]

anyone you trust that you can take for a second opinion ?
For me it sounds like your trying to find reasons why you should not take it but you have to balance that against the positives it could bring .

 

[Cycleops]

The positives:

You're ready to go , no chain involved.
Market is a bit depressed and sluggish.
Upkeep and heating should be reasonable on a small place. You might not be able to change over to gas if no supply. LPG could be an option but then you have to lug the bottles.

Negatives:

As above watch the maintenance charge.
Lack of vitamin D can affect your mood.
Has it got enough space to do what you want. Where's the bike going to go?