Leashold House v Freehold House

mr_m_6

Hi,

Should I expect there be a marked difference in price between freehold and leasehold houses?

The house I really like is leasehold and I am worried by that. Should I be?
What are the main differences and what if any problems could there be or information should I ask for? I already asked about ground rent and they have not paid any.

Thanks for your views and help

jonewer

Main difference is that your lease can expire and you wont own the house anymore.

You also have to pay ground rent, and may have to pay service fees and upkeep charges.

Leasehold is a feudal travesty that most civilised countries have done away with.

david29dpo

You need to find out (in the HIP) how long the lease is and what the ground rent is. Then worry if its 50/60 years or less. I always get the present owner to buy the freehold before i buy such places.

Fire_Fox

Worry if it's eighty years or less as some lenders will not mortgage a property with a lease of this length. Also marriage value kicks in at eighty years which makes extending the lease more expensive.

mr_m_6

I just checked the lease in the HIP and it is over 900 years however lots of small writing in fountain pen about dos and do nots!

The house has been up for sale for over a year and I wonder wether people in general are put off by it being leasehold. maye there is something bad lurking in the lease.

motherofstudents

depends where you are in the country as here in the northwest a lot of houses are leasehold. We have only owned one freehold house. Most people don't worry about it. I would say the downside isthat you may have to ask permission for things like extensions. We only found out when we sold and the solicitor told us we had to have an indemnity insurance for some work we had done. Our lease has 900 years to run and the ground rent is £5 per year.

GDB2222

Many freehold houses also have lots of small writing in fountain pen about dos and do nots - well not in fountain pen. They are generally unenforceable.

A 900 year lease is not an issue IMHO.

mr_m_6

Thank you for your responses.

I have done a bit of research into indemnity insurance and how it can protect against all "leasehold" risks. Also understand that you cannot buy the freehold if you cannot trace the owner!

It all seems a bit less scary now as houses near to me are all freehold and I always thought leasehold was not as good a title.


mr m

timmyt

david29dpo wrote: »

You need to find out (in the HIP) how long the lease is and what the ground rent is. Then worry if its 50/60 years or less. I always get the present owner to buy the freehold before i buy such places.

worry if it is 80 years or less...most buyers from you will,,,,although lenders are conecrned only at say 65.

don't buy leasrhold if you can afford freehold, as with leasehold you are effectively borrowing it, paying rent and a service charge which repairs the real owners building.

continualdiamond

Im in a leasehold property. Pay £15 a year ground rent and also don't control my buildings insurance, the freeholder does its all with 1 company for every building (cauld-sac of purpose built flats, so ground/1st floor only properties) and each flat pays the same amount.

Not really a hassle and pay 1 lump sum for a year in Sept, but annoying that cannot get cheaper quotes for contents/building insurance etc, but at least i do know the building has the appropriate insurance.

Do have to apply for any work done outside to the property, so had to apply and submit details of alternations i wanted to do to the garden and changes to the windows when having double glazing put in.

I can apply to buy the freehold if i want after having lived here for 2 years, have been here 3 now so can at any time buy the freehold now, just cannot afford it though.

mr_m_6

there appears to be no difference in price between leasehold and freehold though. Should there be?

And looking at past house prices in the area all previous sold properties in that road were leasehold too. looks like if I want to live in that road I am going to have to settle for leasehold:)