What is the point of leasehold houses?

Wig

In regards to houses (not flats)

I always avoid buying leasehold property. But what is the point of it all? It used to be the case that the freeholder could refuse to renew (or set ridiculous renewal to effectively refuse to renew), this situation obviously had great advantage to the freeholder. But the press highlighted this in the 80s (?) and the law was changed to give the tenants the right to arbitration (correct?).

But anyway, I don't get it, what is the attraction for the freeholder to manage the property on a leasehold basis? i.e. take a pitance in ground rent.

Then you get the leaseholds for 1000 years, I might consider buying one of these if the ground rent was not too much, but I always have that idea that I prefer to own the land myself.

I can accept that in a few circumstances the freeholder might want to manage the land and set restrictions, but in reality this is only of importance in very few situations - such as somewhere like a country house estate, where they want to keep the village nearby in their management.

Is anyone here an owner of a freehold ground rent (on a house)? Why do you do it? Is it complicated to manage? I often see them in auctions for 3 grand, and wonder about them.

Austin_Allegro

Wig wrote: »

I always avoid buying leasehold property. But what is the point of it all? It used to be the case that the leaseholder could refuse to renew (or set ridiculous renewal to effectively refuse to renew), this situation obviously had great advantage to the freeholder. But the press highlighted this in the 80s (?) and the law was changed to give the tenants the right to arbitration (correct?).

But anyway, I don't get it, what is the attraction for the freeholder to manage the property on a leasehold basis? i.e. take a pitance in ground rent.

Then you get the leaseholds for 1000 years, I might consider buying one of these if the ground rent was not too much, but I always have that idea that I prefer to own the land myself.

I can accept that in a few circumstances the freeholder might want to manage the land and set restrictions, but in reality this is only of importance in very few situations - such as somewhere like a country house estate, where they want to keep the village nearby in their management.

Is anyone here an owner of a freehold ground rent? Why do you do it? Is it complicated to manage? I often see them in auctions for 3 grand, and wonder about them.

Until quite recently it was not possible to have a share of freehold I believe, so leasehold was the only way to have shared 'ownership' of flats.

Even if you do have share of freehold I would think this can only be possible if say a house is divided into 2 or 3 flats. A big mansions block with 100 flats would, I would assume, be very difficult to divide into shares of freeholds (it involves setting up a limited company I think), so perhaps this is why leaseholds remain?

Entertainer

Try selling a flat which is freehold and then you'll have your answer.;)

diable

Entertainer wrote: »

Try selling a flat which is freehold and then you'll have your answer.;)

Can you explain please?

Reaper

Freehold flats are a nightmare. Imagine the guy at the top discovers the roof is leaking but he can't get the others to chip in for repairs because it doesn't affect them (at least not until the water works its way down through the whole building). Same thing for getting people to pay for any maintenance - what do you do if they say they won't or can't pay up?

However I this thread is about leasehold houses, which are the opposite.

dgl1001

flats are leasehold because the definition of a freehold includes the air above it - hence you can't two freeholds occupying the space space. leases have a number of benifits including the freeholder having a stronger relationship with the leaseholder which works well for say the maintenance of buildings etc. Try not to think of leases working for country estates or flats only - they are more for commercial/ industrial uses

Thrugelmir

Wig wrote: »

In regards to houses (not flats)

I always avoid buying leasehold property. But what is the point of it all? It used to be the case that the leaseholder could refuse to renew (or set ridiculous renewal to effectively refuse to renew), this situation obviously had great advantage to the freeholder. But the press highlighted this in the 80s (?) and the law was changed to give the tenants the right to arbitration (correct?).

But anyway, I don't get it, what is the attraction for the freeholder to manage the property on a leasehold basis? i.e. take a pitance in ground rent.

Then you get the leaseholds for 1000 years, I might consider buying one of these if the ground rent was not too much, but I always have that idea that I prefer to own the land myself.

I can accept that in a few circumstances the freeholder might want to manage the land and set restrictions, but in reality this is only of importance in very few situations - such as somewhere like a country house estate, where they want to keep the village nearby in their management.

Is anyone here an owner of a freehold ground rent? Why do you do it? Is it complicated to manage? I often see them in auctions for 3 grand, and wonder about them.

I owned and lived for a period in a purpose built coach house. A 1 bed flat above 3 garages. One of the garages belonged to me. The property was on a 999 year lease with a 1p a year nominal ground rent ( that was never collected). I was responsible for the roof and upstairs exterior, together with ground floor walls that were mine. The 2 other garages belonged to neighbouring houses. There were specific terms written into their freeholds as to their duties for the upkeep of party walls and garage doors etc.