FTB query re freehold or leasehold

trini

Hi I really hope someone can please help. My husband and I are looking to buy for the first time (it seems to be cheaper than renting). We have found some properties we want to view but it turns out they are leasehold.

One has an annual groud rent of £10 with service charge of £1128 (although according to the information in the HIP this seems to include building insurance) and 105 years left on the lease

The other has peppercorn ground rent (nothing) to the local council, £1248 annual service charge which again appears to include building insurance and 75 years left on the lease.

I'm really confused and put off by the thought of a leasehold property as it feels as though it still isn't mine after years of renting where we currently live.

Also there are names of private individuals (not those who have the mortgage on the property) named on land reg documents for both properties alongside the council as the leaseholders.

Please please can someone (or lots of people) give me some advice as to whether they would buy a leasehold property?

Thanks

timmyt

always buy freehold, otherwise you are buying only to still rent......you own someone elses building and have to pay rent and maintenance.

freehold

milliebear00001

timmyt wrote: »

always buy freehold, otherwise you are buying only to still rent......you own someone elses building and have to pay rent and maintenance.

freehold

In some places you don't have much choice. Large swathes of my town are leasehold properties. If it's a house, it's usual that the building is yours, but the ground it stands on is owned by somebody else. In my town, that means either you pay a 'peppercorn rent' to somebody (currently about £15.00pa) or no rent at all. Many leasehold houses are old houses and the land is still owned legally by the old landowner (which is the case with many of the houses in my town). It's worth investigating the leasehold situation a bit more as the negatives are not always the insurmountable problem they sometimes appear.

david29dpo

Freehold every time.

trini

Thanks everyone think that has confirmed what I already thought but nice to get another opinion - freehold for me if at all possible

G_M

Just to put the other side:
Leasehold flats: your management fee removes all the maintenance responsibility; You get cheaper insurance (as it's a block policy) and don't have to faff about each year comparing/renewing; Leasehold is usually cheaper to buy than freehold;
Having said that, I own freehold - happily.

Fire_Fox

Leasehold is great as long as it is managed well, you pay maintenance on any property it is simply more structured with a leasehold one. A 75 year lease will be difficult to mortgage on and it will probably be expensive to extend the lease, you will need to ask the leaseholder to serve notice on the freeholder and the lease can be extended to 150 years. Councils are usually good landlords in keeping the place well maintained but if you fall foul of the 'Decent Homes' legislation you may end up needing to spend thousands on improvements.

thewinkshow

stay away from lease hold if possible. forgot people saying the ease of maintenance and cheap insurance, after all you are PAYING for that maintenance so its not like some perk of leasehold or a freebie, experience says the maintenance is usually very bad, and the price goes up every year, plus the restrictions.
as regards cheap insurance as a perk it is hardly even enough to warrant a plus for leasehold.
the cost of insurance is negligible, just go one one of the comparison sites, then use cash back sites, i guarantee it will cost you next to nothing, surely one can do a 5 minute search once a year, book a day off work to do it if must.

[Deleted User]

our leasehold is managed very well indeed. No worries about things like window cleaning, maintenance, gardening and sometimes you get to share in something that you may never afford if freehold. We share many acres of parkland, tennis court etc and the icing on the cake for us leaseholders is that we have clubbed together and bought the freehold by forming a company, so now we are leaseholders but to our own company and we are in charge of how we manage this gorgeous estate.

Don`t dismiss out of hand but do your in depth homework first

Richard_Webster

Hi I really hope someone can please help. My husband and I are looking to buy for the first time (it seems to be cheaper than renting). We have found some properties we want to view but it turns out they are leasehold.

One has an annual ground rent of £10 with service charge of £1128 (although according to the information in the HIP this seems to include building insurance) and 105 years left on the lease

The other has peppercorn ground rent (nothing) to the local council, £1248 annual service charge which again appears to include building insurance and 75 years left on the lease.

Given the size of the annual service charge doesn't this suggest that both properties are flats so people saying that OP should buy freehold aren't really being very helpful. Flats that have separate freehold titles are effectively unmortgageable so if you want to buy a flat it is going to be leasehold.

Also there are names of private individuals (not those who have the mortgage on the property) named on land reg documents for both properties alongside the council as the leaseholders.

I am guessing that these are the details of the lease which would have been made between the Council as landlord/freeholder and some people who were the first buyers as lessees/leaseholders. This merely identifies the particular lease document which would have been made between these people. If the original buyers sold it on to someone else their names would still appear there because they were the people who signed the original lease, but further down in the proprietorship register the present owners names would show.

LE3

For a flat - leasehold all the way
For a house - always freehold Why would you buy a house & rent the land to out it on?