The property was seriously cheap (Stock Image) (Image: Getty)
Listening to tales from grandparents about snapping up their homes for a mere £2,000 can be quite disheartening, particularly when those same properties may now fetch upwards of £250,000.
However, those interested in buying property in Birmingham were recently presented with the chance to secure a flat in a prime location for just £1. The catch? You’d have to spend money to move into it.
Property guru Mike Frisby took to to speculate on “why it’s been guided at £1”., the property was scheduled for auction on December 17, 2024.
The final sale price remains unknown, but someone might have landed an incredible deal. Mike suggested the rock-bottom was designed to “entice people in,” yet he warned of potential pitfalls when encountering such low-priced properties at auction.
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He pointed out that the flat was tucked away at the rear of the building, not particularly large, outdated, and in need of refurbishment. Despite showing further images indicating the property required modernisation, Mike cautioned that even after renovation, the value might not skyrocket as expected.
Mike emphasised the importance of understanding leases, noting that this property had a “complex set of leases”.
He also warned potential buyers about snapping up properties without doing your research first. He explained: “You’re not just taking a lease from the freeholder, the people who own the ground that this flat is on, it’s actually got a lease and then an underlease, and that underlease, so the bit that entitles you to that flat, has only got five years to run.
“So what’s making it £1 is basically you’ve got this flat, it has liabilities because it’s got service charges for this block, it’s got council tax due no doubt, and therefore, whoever’s owning it, and unfortunately it is in probate so therefore, someone’s passed away who used to live there and now there are liabilities on it, they need to just get shot of it, because it’s not worth much because it’s only got five years left.”
Mike theorised: “Someone could take it on with that five years, renovate it and rent it out; they’re probably not going to get their money back at all, are they? So, really, what is it worth?
“They’re gonna have to extend this under underlease if you can, so you need to look into all of this; you need to have a legal mind on this one; you probably need to refer this to a lawyer, but there is an opportunity there if you can unravel all of this”.
The TikToker also noted the service charge on the property was £1,374 per year, a significant sum. Even if the purchase price is a meagre £1, any new owner must be financially prepared to handle the ongoing costs.