confussed first time buyer

coolblonde

Hi
Im just going through the scary process of buying my first house on my own and have just found out through the solicitors report that the property is leasehold. This didn't come up on the survey carried out and all paper work i have recieved upto now has said freehold.
The lease has got 964 years left on it and i have the right to buy the freehold after living on the premises for three years. Although i can buy the frehold in three years i hadn't really planned on living there that long as i hoped to decorate and sell on in max two years so that i can get up the ladder a little quicker. Also i don't know if this effects the value of the house for myself. This house is a reasonable price for the area but other houses sold in the street have been freehold. Do you think i could try and negotiate on the price before signing the contract? I don't know what to do would really appreciate your advice.

nshackle

I'm in a similar situation, although I have bought my property. The 3 bedroom semi I purchased this summer is currently leasehold. It's a 999 year lease (the house was built in the early 1960's). The annual charge is fixed at £4.60 per annum !

The main issues appear to be that you would need the freeholders permission if you were to make changes within the boundaries of your property eg build an extension or garage. This permission would probably be subject to a fee.

My solicitor advised that the freehold was originally owned by the metropolitan council but sold to a company in the 1990's. The solicitor advised that company's such as this don't make much from the annual charge and that they are keen to make money from selling the freeholds.

I was advised to sit tight as after 3 years I have the right to buy the freehold, but in the meantime the owners of the freehold may approach me offering to sell it to me. I am told that this would more than likely be cheaper than approaching the owners directly requesting to buy the freehold.

I plan to keep my property for 3-5 years. I do however intend to buy the freehold in the near future as it would make the property a more attractive proposition to buyers.

cattie

You have the right to buy the freehold after 2yrs, so don't have to wait as long as you thought.

A lease of 964yrs is as good as a freehold so owning the freehold wouldn't add anything to the value of the house. Once it gets to below 85 yrs is the time to worry about it affecting the value.

Here in London leaseholds are very common & most flats are sold with leases. Only leases with less than 80 yrs become a bit of a concern.