HELP ME! Please, Though it was freehold but is actually leasehold

vicstick86

Hey guys I need some help and advice please, Me and my bf recently put in an offer on a repo, it was all going fine untill today when we went to look at the Hip.
The hip stated that it was a leasehold even the estate agent was shocked when I showed her! On the estate agents website, and a few other bits of info it was down as freehold! And this was also down on our morgage application. The estate agent mentioned that we might be able to buy the freehold but we wouldnt find out untill the contracts are exchanged (damm 28 day exchange rule)

Can anyone tell me what this means for our sale and house? And in the future selling it etc.?? Any info would be great I dont really understand what leasehold actually means.


THANKS

beaujolais-nouveau

vicstick86 wrote: »

On the estate agents website, and a few other bits of info it was down as freehold! And this was also down on our morgage application. The estate agent mentioned that we might be able to buy the freehold but we wouldnt find out untill the contracts are exchanged (damm 28 day exchange rule)

Can anyone tell me what this means for our sale and house? And in the future selling it etc.?? Any info would be great I dont really understand what leasehold actually means.

You must not buy a leasehold property until you have seen the lease - you have no idea of what you might be signing up to - sky-high service charges is a possibility. You must pull back and tell your mortgage-lender. There is all the difference in the world between freehold and leasehold. For my part, I would never buy leasehold again. Too much grief.

Jules100_2

Well it could seriously affect things... or might not at all! A leasehold means that the house is yours until the lease runs out. When it does you usually can just renew the lease. (trouble can arise when the holder of the lease doesn't want to or wants to charge silly money for this..) Nearly all houses in London for example are leasehold.
You need to urgently find out how many years are on the lease. If its 999 years then it really doesnt matter as when you come to sell in say 30 years time then there will be loads of time left and it wont really matter. If there's only 50 years on the lease then it could really affect things as when you come to sell, a seller wont want to spend hundred of thousands of pounds on a property that may not be theirs anymore in 20 years.
There could also be small print conditions on the lease like you cant alter something or have to pay service charges or suchlike. 100% DONT go ahead until you see the full documentation for this. Chances are it'll all be fine but you need to be sure.

maryotuam

Surely you can't be held to a contract where you were misled. Can you pull out / withdraw from the deal?

cuthbert_the_octopus

I would 2nd not buying leasehold again!

You also need to see how many years are left on the lease, this can affect how easy it is to resell, and if you have to pay for a lease extension (ours came in at £15k).

princeofpounds

OK, firstly don't buy without understanding what you are buying. Then inform the agent you are not happy about the misdescription (they can be reported to OFT for this if you care to do so).

In a lease, you own the rights to the house for a long time, but not the ground and the reversion rights to the house (i.e. it goes back to the freeholder). The freeholder can charge you ground rent (in the lease, often small but not always) and has a reponsibility to maintain the exterior fabric of the building but passes the cost onto you.

If you are in a leasehold long enough, you can get a right to extend the lease under a government tribunal. If you are say extending 75yrs to 99 it's not going to cost much on top of a solicitor to process it. If it's something like 10 to 70 you might have to pay a large part of the value of the house! You will need freeholder approval for substantial alterations and they can try to charge you for it. If it is under 70-75 yrs lease it can be difficult to get a mortgage on and therefore sell. Also, if you have been there a certain amount of time and control enough of the property on a lease (or have enough allies in something like a block of flats) then you can apply to manage the block yourselves or even buy the freehold, for a price.

princeofpounds

PS leaseholds are not necessarily bad, many many houses are like this and most flats, which plenty of people live in fine. The key is to understand what you buy.

Ulfar

I would never buy a house leasehold.

I have owned a flat that was leasehold but the management of the development was by a tenants association and therefore you had a say in how things were done.

This though is not always the case, even with it involves some time and effort.

You have to tell your mortgage company otherwise you have obtained a mortgage fraudulently.

vicstick86

The ground rent is £9.80 a year and the lease is 1000 years long starting from 1968, so errm thats about all I know! Who would know the terms of the lease? Solicter or EA?

vicstick86

I can pull out, but I really like the house and paid for survey etc.
Just interested in what kind of problems it can cause.

The morgage company know, we paid for a advisor orginally and he got straight onto it today.

Idiophreak

Solicitor should be able to get hold a copy of the lease for you...