Property: Move on up; you just might get the house you wanted

Property: Move on up; you just might get the house you wanted

What do you do when your flat is too small? For most of us, the solution is to find a bigger place somewhere else. But as Fiona Brandhorst reports, the answer may lie just above, or below, where you live now.

Small and badly converted is how Janet describes the ground-floor flat she bought with her partner Chris seven years ago. So what possessed them to buy? The view, of course. Their flat overlooks a green and pleasant hill tucked away in a conservation corner in Brockley, south London.

So when space or rather the lack of it was coming between them and their weekend guest list, they decided to move up in the world instead of out, by buying the flat above. "When we heard the owners were moving out to the country, we immediately said we were interested," says Janet. "Chris works from home and really needed his own studio so it came at the right time.

"Friends thought we were mad buying by instalments," ventures Chris. "We worried whether it would be easier just to buy somewhere else."

They had to have both flats surveyed for the mortgage and the surveyor valued their original flat at pounds 15,000 less than they paid for it (bought after the "lunatic period" of the late Eighties). "We were a bit concerned at the time," says Chris, "but in retrospect he did us a favour." It meant they bought the top flat for a good price and it was still a cheaper option than buying a "whole" house around the corner (without the all- important view).

However, they encountered opposition from their mortgage lender. "They couldn't understand what we were trying to do," says Chris. "They kept saying we'd need planning permission, even though the borough architect said we didn't." In the end the appropriate certificates were issued, albeit unnecessarily, just to satisfy the lender.

"The council tax people were also confused but it was just a question of moving up a band." Buying the freehold from the original developer was an important part of the plan. In the end it was purchased jointly with the owner of a third flat also on the ground floor.

It was only after the sale went through that the hard work started. A non-load bearing wall dividing the hallway for access to the two flats was removed. This revealed an 18 inch difference in ceiling height, lower in Janet and Chris's flat, for fire regulations.

"From then the project slowly snowballed," says Janet. Curious to know if any of the original mouldings had been covered up, they removed the suspended ceilings. None were found but it gave them the chance to resite doors and redesign rooms.

"The mess was incredible," says Janet, "but at least we could escape upstairs to a complete flat while the work was being done." And they speak highly of their builders - "no radios, swearing or shouting" - just the usual copious cups of tea. To save money Janet and Chris did much of the decorating themselves. "I've become a dab hand at making good," says Janet, "with plenty of advice from the builders."

No structural changes were required to the upstairs flat, which has provided four further rooms and a bathroom. The former kitchen is soon to become Janet's studio. "It was strange having stairs again," she says. "We haven't unified the plumbing and electricity yet," says Chris, "so we still have separate bills for each flat. The gas people just can't understand it's one house - we've had the meters read three times in the last six weeks."

Overall Janet and Chris are delighted with the results. "When you spend most of your life living and working as we do at home, it's important to get it right," says Chris. "We saved on the cost and the anguish of moving and a big plus was not having to use an estate agent."

Liz and Peter Norton bought the middle flat in a detached 1920s converted property in St Anne's, Lancashire, for a weekend base when visiting relatives nearby. When the larger, ground-floor flat came on the market as a repossession they bought it as a rental investment.

"There seemed to be very little to do to it," says Liz, "so it made economic sense to buy it." The top flat was owned by a young woman and was the constant source of noisy late-night parties. Sound proofing was non-existent and their tenants began to complain.

"When we arrived on the Saturday, we'd never know what sort of night we'd have," says Liz. Eventually, this flat was also repossessed and Liz and Peter made their move to own the whole house. "The flat needed total gutting and refurbishing before we could rent it out," says Peter. "It was difficult to co-ordinate the work when we were only there at weekends."

The Nortons set up their own management company handling the buildings insurance, maintenance of the common areas and external parts of the property, including the garden, and would like to buy the freehold. "Our solicitor has made enquiries but can't establish who owns the freehold, so we haven't paid any ground rent yet," says Liz.

Once the work was finished the idea was to sit back and enjoy their investment. However, Liz and Peter have found the level and cost of maintenance has been much higher than they expected. Shortly after buying the second flat, the communal stairway collapsed and the garage roof needed to be replaced. Repairs internally and externally are ongoing.

While they are pleased they can specify the type of tenants they want - professional couples, no children or pets and non-smokers - they have had long periods without rental income when the mortgage, council tax and utility bills still had to be paid.

"We bought the properties with variable-rate mortgages, but property prices and rental incomes have not increased at the same rate in the north of England as they have in the south," says Liz. "Even if we were able to sell the flats now we would make a loss." Ironically, if the property were to be returned to one dwelling it would command a higher price and would sell more quickly. "It would cost us upwards of pounds 20,000 to convert it back, so it's just not viable," says Liz.

Buying the flat above or below may give you more space but not necessarily bring you any financial gain. While Janet and Chris have aspirations to buy the remaining ground-floor flat to complete their home, one suspects that when the price is right Liz and Peter will be beating a path to the estate agent's door.