buying house leasehold-freehold

azimx

i need some help. i am in the process of buying a house, i have already appointed a solicitor and the mortgage offer (from scottish widows) is accorfing to them "in the post" the survey has already been done. the house was valued at 85k.
my problem is that when the house was valued the vendor(no estate agent involved) stated to the surveyor..that the house was freehold..the survey valued the house on that bases. unfortunately it now transpires that the house is on one of those loooong leasehold(999year term).
my problem is will the mortgage company need to revalue the property? (and me have to pay for another survey)
and in reality what is the difference between long leasehold and freehold especialy in terms of value pf property.
the vendor seems to think he has bought out the leasehold(ie he does not have to pay ground rent and the land is regitered to him.)

im a first time buyer and all this is very confusing.
do i need to make sure he also sells the ground rent part when exchanging contract?


anyone got any ideas as to how long buying a house takes(i have heaqrd anywhere between a week to 6 months!!!)

i have now secured a mortgage and appointed a solicitor and also have had the survey done...what are the next steps.

the house is for sale at 84k the survey value is 85k scot wid will lend me 75k less 3.5k retention for works needed doing. so about 72.5k is mortgage.

do i lodge the remaing 11.5k with my solicitors or keep it in a bank?
what does the solicitor actually do.
(the solicitors is from cheapcheap conveyancing...called beaumont legal in wakefield north england).
any ideas help appreciated thanks in advance.

Jorgan_2

Get your solicitor to check whether the property is leasehold or freehold, this is part of his job in acting for you. Make sure you tell your solicitor that the buyer claims to have the bought the freehold, if so, he won't have to sign over ground rent to you, if its freehold, there shouldn't be a ground rent payable on the property.

How long it takes for a house purchase to go thru depends on the length of the chain involved, solictors, how quick the mortgage companies get mortgage offers out. A closed chain should be able to be completed in 6-12 weeks from everything being agreed.

Speak to your mortgage broker/lender with regards to whether you need a new survey/vsaluation done. The surveyor may just change part of his report to reflect that it is a leasehold property, if any change is needed. The long lease shouldn't be a problem.

Keep your deposit money in your account until your solicitor requests it.

Wickedkitten

If it is a leasehold, thats extra on your solicitor fees as well.

AndrewSmith

Usually if it is a simple change from freehold to standard leasehold it can be dealt with by just changing the mortgage offer itself. The lender will ask for the ground rent/service charge costs and the term remaining on the lease but a re-valuation is not normally necessary, they simply amend and re-print the offer to reflect this. Takes about 4-5 days.

Best to check with the broker or lender though.

Andy

[Deleted User]

Also bear in mind that if it is leashold, you are only buying the 'shell' whereas the ground it sits on and the external walls will belong to the Freeholder and you'll have to pay ground rent, maintenance fees etc. and when/if you want to carry out home improvements on the exterior of the house you'll need his permission first which can take a while...
I used to own a leasehold property and I hated it because my Freeholder would always use cowboy builders to carry out repairs to the property.

Ian_W

Van,
If you're dealing with a leasehold house with a 999 yr lease it's very unusual, in my experience at least, for you to have to pay maintenance or anything other than a ground rent. TBH on the small estate we live on most have had extensions or improvements without approaching the freeholder and with 960yrs left before she can take possession of the walls and land it's a bit early to be worrying on that score. For most practicle purposes a long leasehold like that is little different from owning the freehold and it certainly shouldn't affect the valuation.

AndrewSmith

I have to agree with Ian W (blimey I can't beleive how much we are agreeing lately Ian, there will be talk about us :rotfl: )

Having dealt with a couple of long leashold houses recently in the Manchester and Oldham areas it made little if no difference to the comparable valuation of a similar freehold property in the local vicinity.

Just check the terms of the lease with your solicitor, they will tell you if all is OK.

Andy

[Deleted User]

I just learned something new, thanks guys, I had no idea.

BobProperty

A lot of the property older than, say, WWII, in this area is either freehold or on 999 year leases. There is no difference in market value. It is only where the property has been built more recently that developers have thought about the long term benefits of shorter leases. Having said that, I think my current lease is for as little as 125 years, hardly the 3 years left like on some properties in London.

azimx

cheers everyone for all the info.
will get onto my solicitors..to see what the situation is.
hopefully shouldnt be a problem..but knowing my luck.......
ive had 3 house fall through before completion.
house no1 gazumped no2 needed structural work. house no3 was overvalued by 40k(ie the survey came 40k below asking price)
fingers crossed.

AndrewSmith

azimx wrote:

cheers everyone for all the info.
will get onto my solicitors..to see what the situation is.
hopefully shouldnt be a problem..but knowing my luck.......
ive had 3 house fall through before completion.
house no1 gazumped no2 needed structural work. house no3 was overvalued by 40k(ie the survey came 40k below asking price)
fingers crossed.

No worries, keep us posted

Andy