Home Life: Let's hear it for the style council

It is still possible to find bargains in a top notch area. Felicity Cannell looks at ex-local authority housing

When is a council flat not a council flat? When it's sold to a private buyer? Wrong. It then becomes an ex-council flat (or ex-local authority flat as the phrase now goes) and remains in this state for a long time.

It is the stigma that goes with this label - of living on a council estate side-by-side with council tenants - that does most to define this market. Problems selling properties on estates, and low prices, have little to do with the actual fabric - cheap modern purpose-built properties versus elegant period homes. Proof of this comes from Regalian's recent conversion of an entire council estate, including two tower blocks, in Salford, near Manchester, into private-sector housing. All of the flats bar one have been sold with no trouble at all.

Yet more than a quarter of the country's council accommodation is now in private hands, and owner-occupiers are happily living cheek-by-jowl with tenants. The truth, of course, is that in most cases you won't get any more aggravation from a council tenant than you would from your neighbours in Acacia Avenue. There are troublesome estates where you are more likely to be burgled by your neighbours but they're usually easy to identify and thus avoid. Generally what should be of more concern to would-be buyers is being fleeced by the local council than by the people who live next door.

Anyone who has had problems with a freeholder might think that having the borough council in this role is a godsend, that at least here you can expect fair play, but this is not necessarily the case. The spectre of huge and sudden maintenance bills, especially on properties that have been neglected, are a real concern. There are all sorts of anecdotal horror stories of huge renovation works that land owner-occupiers with massive bills. In Greenwich, south London, tenants-turned-leaseholders in Rockfield House, on the Meridian Estate, are facing bills of up to pounds 25,000 each; the block faces the Millennium Dome and the council wants it looking spruced up by New Year's Eve. And M&M Property Link in Islington, north London, is advertising a three-bedroom ex-local authority flat in an eight-storey block; for pounds 65,000, in one of the most up-an-coming parts of the capital, it seems like a bargain. But next year the block is having a major overhaul and each flat is likely to receive a bill from the freeholder, the Borough of Islington, for pounds 8,000-10,000.

High renovation costs are a particular danger with flats constructed between 1960 and 1981. Many blocks were system-built during this period for cheapness, and in some cases missing and sub-standard parts lurk in the structures. Now essential works need to be carried out, while people are living there, and this mode of working is time-consuming and expensive.

Yet most buildings are sound and while charges can be crippling for an ex-tenant on a low income, the private buyer should remember that few leasehold properties come without the possibility of a big bill attached. And when you look at what you are getting for the money, it still looks good. Compare the bill on the Islington flat with a loft a stone's throw away in Clerkenwell which would sell for at least pounds 150,000 and which then needs around pounds 30,000 spending on it, and the price per square foot looks very attractive.

More than half ex-local authority property is in Greater London. These homes are as diverse as the rest of the country's housing stock, but the majority are located in estates, ranging from Victorian mansion blocks to Sixties and Seventies high-rise and low-rise conglomerations. Predictably, the older mansion-style properties are more sought-after than modern flats and in central areas flats in blocks of this type now sell at full market rates.

There are still bargains to be had in other areas, however, although if you think you've spotted one grab it quickly. Prices across London have risen over the past couple of years, older ex-council property has become the best option for a growing number of buyers and the differential with private-sector prices is closing. In Islington, for example, prices generally have remained static over the last 12 months after a steep rise, but in one ex-local authority mansion block they have gone up by 40 per cent.

More modern flats and estate housing - except the really swanky addresses like Erno Goldfinger's listed tower blocks in east and west London - still tend to be stickier, although they are increasingly popular as investment buys and a lot are owned and rented out by estate agents. In North Kensington, for example, there is a lot of local authority housing stock in the bomb- damaged Latimer Road area, and despite being on the fringes of trendy Notting Hill Gate, prices are still low. "Most go to investors, not owner- occupiers," says Simon Jobson of Winkworth North Kensington. "Capital growth is low, yet rental yields are quite high, around 15 per cent."

For a real bargain, look further away from the city centres. On the edges of estates are local authority houses with gardens, built when planners realised that flats with precipitous drops from the balcony were not best suited to families with young children. Carol and Martin Halliday bought their house in Loughton, Essex, without realising it was ex-local authority. "I only found out after talking to the neighbour who had bought hers from the council in 1994. All I knew was that it seemed a bargain," says Carol. Bought last year for pounds 88,000, it has three bedrooms, sitting room, dining room and large kitchen/breakfast room. Private sector properties nearby fetch upwards of pounds 120,000. And the house has considerably more space than the family's ground floor two-bedroom flat, which they sold for pounds 71,000. But heating and maintenance are already proving to be no more expensive.

Carol reckons that eventually her house will be prove its true worth, "when people realise the time, effort and money involved in running a house over 100 years old. After all, council homes were designed to run cheaply because the council was paying for them."

Winkworth North Kensington 0171-792 5000; M&M Property Links Islington 0171-704 0664

BARGAIN HUNTER

Area is particularly important with ex-council property, particularly in terms of resale value. Prioritise a good postcode.

Hang around the block you've chosen, especially after dark. How far will you have to walk from the street to your front door through dark alleys and corridors? Check with local police about crime rates.

Check out shops close by and talk to the shopkeepers. If they have bars or bullet-proof glass across the counter, maybe you should think again.

Go through service charges and maintenance past, present and future with a fine-tooth comb. Make sure the roof isn't due for renewal. Buy in a block that is well-maintained. You might pay less in a run-down estate but if it is ever improved, remember you'll be paying the bill.

It is possible to get a normal mortgage on virtually all ex-council property (subject to usual survey standards) except in blocks over five storeys high.