Blue chip off the old block

Right-to-buy has meant good returns for former council flat tenants but, as ever, location is vital, says Chris Partridge

Stephen Maguire's family home is a former council flat in Wandsworth. It's not exactly a palace, but thanks to the right-to-buy, it is helping fund his move to the country. Along with many other former council tenants, Maguire has not sold the house his mother bought four years ago (at a £30,000 discount on the market price), but has done it up and is renting it out at £1,360 a month through Chesterton. This is helping him to buy a house near Harrogate, where he is being sent by his bathroom company. "It was our family home for 20 years. My mother bought it for £98,000 and when she moved to Ireland to be close to our relatives, I refurbished it throughout."

All the best advice on decorating a place for letting was followed. "I was aiming for a contemporary, minimalist look," he says. "It has white walls, laminated wood floors and high-spec kitchen and bathroom." The result is an investment yielding 16 per cent. Even if the Maguires had paid the full price for the flat, the return would have been a very acceptable 12 per cent. "It goes a long way to financing my house [in Harrogate]," he says.

For Anne Cain, her old council flat in Battersea is her pension fund, and as someone in the up-and-down business of selling dolls' houses by mail order and on the internet, she regards it as an essential part of saving for the future. Cain bought the one-bedroom flat from the original tenant for £57,000 in 1990, and lived in it with her husband Dan for the first eight years. Then their first baby arrived, and with it thoughts of country life. "We had to get a bigger place, but we kept the flat on to help pay for it," she explains. "We did the place up cosmetically to let it, and it has worked brilliantly. Tenants have stayed for years, and have left it tidier than we did when we moved out."

This is in large part because the Cains made the effort. "We have been good landlords. Whenever there was a problem we have tried to help as quickly as possible and we have never put up the rent as long as it covers the mortgage."

The capital appreciation means the flat is now worth a substantial sum, which she does not want to sell for fear it will leak away. "I see it as a nest egg," she says.

The good returns sometimes obtainable on former council properties were highlighted recently, when it was discovered that the value of flats in a dreary block in Edinburgh had soared by six or seven times in less than a year, because of the construction of the Scottish Parliament building nearby. One owner had bought their flat for £11,000 a few years back and was confidently expecting the value to reach £250,000 as speculators moved in.

Ian Dickson of Winkworth in Hammersmith says former local authority flats are often a better deal than new apartments. "Buying an ex-council flat as a buy-to-let investment could prove a financially sound decision because they can be significantly cheaper than other purpose-built or conversion flats."

As ever, location is paramount. "Properties that are situated in small blocks often have greater letting potential then those on the large council estates," he advises. "The target market for ex-council properties is among young professionals, so when purchasing a property you should look for a location that has good transport and leisure facilities nearby."

However, flats on large estates can also be a good buy if it is convenient for a large college. "As a basic guide the larger the block the younger the tenants, until the property shifts from attracting young professionals to students," Dickson says.

Discover more property articles at Homes and Property
Property search
Property search
  • Get to the point
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Massage Therapist / Sports Therapist

£12000 - £24000 per annum: Recruitment Genius: A opportunity has arisen for a ...

Ashdown Group: Practice Accountant - Bournemouth - £38,000

£32000 - £38000 per annum: Ashdown Group: A successful accountancy practice in...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped commission: SThree: Does earning a 6 figu...

Recruitment Genius: SEO Executive

£18000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss