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A house and a block of flats in a leafy residential area. SAM Conveyancing discusses the considerations to your question, Should I buy a flat or a house?

Should I Buy a Flat or a House?

23/01/2024
(Last Updated: 15/05/2024)
719
14 min read
Key Takeaways
  • Flats are often cheaper but smaller.
  • Houses are typically owned by freehold and flats are owned by leasehold, which has some key differences.
  • Historically, houses appreciate in value faster, but this may change with the introduction of 999 year leases.
  • Both flats and houses make excellent homes and investments, depending on your personal priorities.
  • You should get a RICS survey before buying a flat or a house.

Is it better to live in a flat or a house?

Houses show greater appreciation compared to flats, so as an investor, you might think buying a house is a no-brainer. However, capital growth is a gamble, flats can make an excellent investment and there's so much more at play, especially when you're going to live in the property short or long term.

When you're asking yourself should I buy a flat or a house, there are lots of factors to consider. There are pros and cons to both, which will bear more weight depending on your personal priorities; we'll compare these in the article below. First, though, it can help to get clear in your mind (and with whoever you may be buying with!) on the following questions:

  • How much space do you need?
  • How much can you afford to spend? Now, and monthly?
  • How important is outside space? Could you share your garden, or make do with a local public park?
  • How important are privacy and security to you?
  • How closely are you comfortable living with other people?
  • How much maintenance are you ready to be responsible for?
  • How do you expect your living requirements to change in the future?
  • How important is the freedom to make changes to your property?
  • Do you have pets?


What are the advantages and disadvantages of buying a flat?


Pros of buying a flat

  • Usually cheaper than houses
  • Fewer responsibilities as these are handled by the freeholder or management company
  • Wider choice of location including prime locations in inner cities
  • More security on flats which are not at street level
  • Many flats come with luxury perks like secure parking, rooftop gardens, gyms and even spa facilities
  • Some apartment blocks have a real sense of community

Cons of buying a flat

  • You don't own the freehold, just a finite lease (and sometimes a share of the freehold)
  • Service and maintenance charges must be paid to the freeholder or management company
  • Unable to make structural changes
  • Less space or privacy, sharing internal walls, floors and ceilings with neighbouring flats
  • Some flats do not come with parking, which can be harder to find in densely populated areas
  • Ground rent (on older leases)
  • No private garden (except for some ground floor flats)
  • May be considered higher risk by lenders
  • May be clad in dangerous materials

What are the advantages and disadvantages of buying a house?


Pros of buying a house

  • More space
  • More privacy
  • Private garden (except for in some cases)
  • More desirable to longer term tenants, if you want to let the property now or in future
  • Freedom to make structural changes (unless the house is listed or in a conservation area)
  • Can be extended or converted to increase value
  • Off-road parking is a common feature
  • Extra storage in the form of an attic, basement or garage

Cons of buying a house

  • Often more expensive
  • Fewer available in prime inner-city locations
  • Sole responsibility for repairs and maintenance
  • Heating costs are often higher, particularly in detached and semi-detached houses
  • A higher value property will often mean a higher band for council tax

Is it a good idea to buy a flat?

At first glance at the lists above, you'll notice more pros on buying a house and cons on buying a flat. But, what really matters is which of these are a priority to you and your household. We break down some of the more complex considerations below.


Leasehold vs Freehold

Flats are owned by leasehold, which has many differences to traditional freehold ownership of a house, as we discuss in another article Freehold vs Leasehold - Tips and Advice. We strongly recommend you read this article next if you're not already familiar with the quirks of owning a leasehold.

A major consideration when buying any leasehold is to find out what the ground rent and service charges are, as well as whether there are any upcoming major works and whether you'll become liable for funding them. There are many leaseholds available with perfectly reasonable service charges (in exchange, your building is taken care of), peppercorn ground rent and a well managed 'sinking fund' to cover major works, but you should be wary of unreasonably high charges or badly managed buildings.


Maintenance

When you own the freehold of a house, you are responsible for insuring and maintaining the whole property. This can be time consuming and expensive, so many homeowners prefer the lesser responsibility of owning a leasehold property, where their service charges pay toward the management of the building. This way, roofs, stairs, gutters, gardens and walkways (check the terms of the lease) are all looked after with minimal involvement from each leaseholder.

Some people prefer the autonomy of owning a house and looking after it themselves, choosing exactly how much to spend on maintenance and how to apportion it. This certainly gives you more freedom to personalise your property and express your style and taste; however, beware of listed houses or homes in a conservation area, as these involve additional restrictions on what you can do to your property.


Amenities and luxury features

Some apartment blocks (particularly purpose built flats) come with extra perks, like underground parking or a rooftop garden. If you're looking for luxury and you're willing to pay higher service charges, you may also find a flat in a building with its own gym and spa. Larger blocks of flats often have managed gardens, so you get the benefit of well-kept outdoor space (albeit shared) without the responsibility of mowing your own lawn.

Flats tend to be in more built up areas, meaning they may be closer to local amenities than a house in the suburbs.


Forever home or rung on the property ladder?

The sooner you get your foot on the property ladder, the sooner you stop 'wasting' monthly rent and start investing in your own equity. That being said, it can be inefficient to buy whatever you can afford now and move again too soon, as you might find that the costs of moving (including stamp duty) tip the balance out of favour, especially where property values aren't appreciating at the same pace they have in the past. It's safest to opt for a property you will be comfortable living in for at least five years.

If you hope to start a family, a flat may not be ideal as it offers no opportunity to expand your household, and you may have to upsize in just a couple of years. This can be problematic if you have fixed your mortgage for longer and you could be stung with hefty early repayment charges.

If you are looking for your forever home, a flat might be the perfect fit for you, as long as you're not going to need more space in the future.


Lifestyle

If you're wondering Should I buy a house or flat? you'll need to really consider the lifestyle each can offer you. Really imagine living your unique life in each and see what feels right; here are some examples which might help:

Living in a house offers more space for hosting; dinner parties, garden parties, movie nights and barbeques. You're likely to be closer to outdoor spaces, with a quieter, slower pace of life. Your social life may centre around the local pub, community centre, or school if you have children. You may enjoy the peace of long afternoons in your own private garden or reading by the wood-burner. You might have a spacious garage for a car or camper, with storage for your mountain bike or river kayak.

Living in a flat offers more opportunities to live in the throng of busy city life. You can spend your time between any number of nearby bars, restaurants, gyms, cinemas, museums and parks, enjoying the proximity of friends and loved ones or the anonymity of crowds. You might have less space at home, but the city (or town) is your playground.

You might find a cosy terrace in an inner city suburb which offers you a compromise of the two. A little piece of the city to call your own, with a manageable little garden to trap the sun, grow your own herbs or read a book in peace and a front-garden bike lockup in pedalling distance from the city and amenities. A loft to store your camping gear for the odd weekend excursion out of the city and to convert one day if you ever do have kids.


Restrictions

We don't live in the Wild West and owning a freehold doesn't mean you can do just anything you like. However, owning a freehold house does come with fewer restrictions than owning a flat. With enough funds and the relevant planning permission, building control sign off, and party wall agreements (if works are on a shared wall), you can repair, adapt, convert, extend, or knock down and rebuild your house if you so choose.

In a flat, your freedom to make structural changes is severely limited and essentially all internal. The terms of your lease may prohibit any works beyond the purely superficial, and even these will often require the permission of your freeholder and party wall agreements from your neighbour on the other side of the wall in question.

It's not just building works on the property you've got to think about. Leaseholds can come with all sorts of restrictions, which will depend on the terms of your lease. Your conveyancing solicitor can explain these to you, so it's important you choose a conveyancer who is skilled and knowledgeable when it comes to leaseholds.

Some leases prohibit pets, subletting, wooden floors, removing internal walls, hanging laundry out to dry or even fitting an aerial or satellite dish.


Is it cheaper to own a house or a flat?

Flats are generally cheaper to buy than houses, but you'll get more square footage for your money if you buy a house. There are several factors to consider when you're deciding Should I buy a flat or a house for value for money? We break these down below:


Property price

Looking at properties with the same number of bedrooms and bathrooms, flats are typically cheaper than houses, but the price will also be affected by quality and location. You can usually find a cheaper house with the same number of bedrooms if you're happy to live further out of town. You will often find that houses are better value on square footage, meaning you get more space for your money if not more rooms.


Average property prices in major locations
Land Registry Data as of November 2023

Location
All properties
Flats & Maisonettes

London

£505,283
£417,814

Manchester

£238,461
£200,086

Birmingham

£225,934
£151,627

Leeds

£242,238
£156,311

Southampton

£239,156
£162,961

Liverpool

£177,521
£134,954

Newcastle

£193,032
£124,076

Nottingham

£184,054
£129,006

Sheffield

£217,090
£133,435

Bristol

£353,544
£265,209

Ground rent

We mentioned ground rent and service charges briefly in the section on Leasehold vs Freehold above. Your ground rent is the rent you pay each month just for being on the freehold. Leasehold reform means that new leases and lease extensions are all reduced to peppercorn ground rent. Older leases may still be subject to higher ground rent and leases extended informally will keep the old ground rent until the original term has expired.

If you are looking at buying a lease with high ground rent, you may be able to ask the seller to begin a formal lease extension, which will bring the ground rent down to peppercorn when you finalise the extension, but this will cost you a premium and extra conveyancing work.

If you are stuck with the ground rent, you might just have to decide to pay the annual fee or look for another property. Ground rent is now capped at £250 per year, or £1000 in London.


Service charges, maintenance and major works

Service charges are paid to the freeholder or building management company by all the leaseholders. It is spent on maintaining the building and common areas and so it is important that the building manager is competent. If the building is being mismanaged, there are provisions for the leaseholders to intervene. The service charges are based on the size of your flat and are around £1,500 per year on average, or £2000 in London.

Check the terms of the lease for how your service charges will be calculated. It is not enough to look at the charges paid in previous years as it is not uncommon for leaseholders to sell their flat before a steep increase in the annual fee.

Major works which may not be covered by the basic service can be charged additionally, but a well-managed building should have a 'sinking fund' which sets aside some of the service charge payments into a separate pot for large expenses like a new roof, new lifts or major structural repairs. If each leasehold will have to pay more than £250, then the building manager must carry out a section 20 consultation.

When comparing whether you should buy a flat or a house, don't forget that you'd be solely responsible for the maintenance of your house. With a new roof costing around £7000, a rewire costing anything from £1,500 to £9,000 and repointing costing around £4,000 (to give just a few examples!), paying an annual contribution toward well-managed maintenance may seem more reasonable in balance. The examples above provide an excellent example of why you shouldn't skip your home survey when buying a house or a flat.


Running costs

Flats tend to be newer and better insulated than houses due to modern building regulations, but you'll also benefit from sharing your walls, floors or ceilings with another heated flat rather than a cold external wall. Assuming that your flat is in a more built up area, you're also more likely to be within walking distance of all your basic amenities, which may save you the costs of running a car.


Mortgaging the property

Lenders tend to consider flats as higher risk, so you may find it harder to find a good deal on a flat than on a house. You should also be wary of buying a flat in a building of 5 storeys or more in particular, or a shorter building with potentially flammable cladding. You shouldn't have a problem getting a mortgage on a flat with a valid EWS1, which shows the building is safe (A or B1 rating). If the EWS1 is rated B2, you will also need a Deed of Certificate to satisfy the lender that leaseholder protections apply and you will not become liable for remediation of dangerous cladding. Your lender may also accept evidence that your building will be fixed by the developer (this is known as 'self-remediation') or that the building is covered by one of the recognised Government schemes – the Developer Remediation Contracts, the Medium Rise Scheme or the Building Safety Fund.

Even if you are a cash buyer, you should not buy a flat with dangerous cladding without the same evidence they would require, or you may end up having to pay to make the building safe yourself.


Are you ready to buy a flat or house?

Get our guide on buying a home below, or order it free of charge when you instruct us to handle your conveyancing. We'll look after you and your purchase whether you choose to buy a flat or a house. Get a fixed fee conveyancing quote with our no sale no fee guarantee!






Are you feeling stressed about buying a house?

How To Buy A House Without Killing Anyone could be the difference between every mover’s dream, buying and moving into your new home stress free, or, stress, missed deadlines, legal disasters, building defects, and possibly the collapse of the whole transaction. (Costing you a small fortune, a head full of grey hairs, and, driving you to threaten the life of your solicitor, lender, co-owners, family, partner, or some combination of all five).

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Caragh Bailey, Digital Marketing Manager
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Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.

Andrew Boast of Sam Conveyancing
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Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.

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