House Advertised as Freehold Turns out to be Leasehold

lerougegorge

Had an offer accepted on a mid-terrace house in Bath, was advertised as freehold (and have a memorandum of sale from the agent saying so). However, my solicitor just informed me it is a 999 year lease (at £9.90 per year). In light of this information, should I reconsider my offer? I'd be happy to proceed at the original price if the property were freehold. Some other information:

- About 1/3 of the properties on the road appear to be leasehold, probably due to lanes at the back and a communal garage area.

- Sales prices for leaseholds on the road have (on average) been lower than freeholds, but hard to say if this is due to when they were sold, condition, etc. All houses on the road are identical in build, although some have been extended.

Would like to buy the house, but don't want to make a mistake, either. Homebuyers report has been done, so £470 would be wasted, but solicitor is "no-win no-fee."

Any advice appreciated.

PasturesNew

I'd buy it. 999 years is a bit longer than you'll live - and, being mid-terrace, you probably never had grand plans to redevelop the site and need special permissions that would be unlikely to be granted... having said that, has anybody else stuck up an extension or conservatory?

lerougegorge

Yes, the house actually has a conservatory, so modifications should be ok (I'd like to convert the loft, but that's it). Just worried that I might be paying too much, if leaseholds tend to sell a bit lower. There were three other offers on the property (according to the agent), but they would have thought it is freehold, too.

Bananamana

£9.90 a year thats the effective difference between the house being freehold and leasehold

not worth pulling out over. You will have covenants under the lease same as any other house (I'd be suprised if there was anything particularly unusual)

In any event you could approach the freeholder and purchase the freehold and merge the titles. At a ground rent of less than a tenner you'd be looking at no more than £500 including legals IF YOU REALLY wanted a freehold property.

To be honest though just pay the ground rent

sonastin

I bought the freehold to my house a few years ago. At the time I was told that I'd get the money back when I come to sell it because freehold will be worth more.

I know that it certainly doesn't feel like I got any more for my sale because it is freehold. It might have made the house more attractive but I don't know that my buyer even cares.

On flats I can see that it really does make a difference but on a house with such a long lease and such a low ground rent, I don't think it is really such an issue.

999 is a bit odd at this point though. I would have expected the lease to start at 999 years and some of that time to have expired by now. Has the venor decided to keep hold of the land for some reason and set up a new lease?!

lerougegorge

Thanks for all the input - one last thing I noticed (while reading the original lease) - the ground owner legally has the right to inspect the property twice a year, that seems like a bit of a pain, but maybe not a deal killer.

Sonastin, sorry, it was actually 999 years from 1962 (when the property was built), so a bit less now.

sonastin

That makes more sense!

Ground owner might have the right to inspect the property but I bet they rarely do, if ever. And as it is just a lease for the land - you own the building - I'm sure their inspection can be done from outside so you never need know they are there anyway. Unless they need to see inside to make sure you aren't tunnelling through to Australia and stealing all their land from under your house :rotfl:

ILW

What if you discover oil under the property?

Bananamana

ILW wrote: »

What if you discover oil under the property?

make sure it doesnt run into the rivers/ sea as you could face a huge share drop ?!?!

lerougegorge

ILW - Apparently they just own the land, so I think that means I own the oil underneath the land.

Alias_Omega

You made an offer on the image that the property was a Freehold.

Have a think what the Leasehold price would be..