FTB - Leasehold?

NVRAM

Hey guys,

Been lurking for a bit again so time to post
Me and the GF have currently put in an offer on a property of £130k
Have a deposit of around £22-26k

Has a recent HIP so theres a little bit saved, FTW so no SD AFAIK

We have been told that the property is leasehold with a length if 999years and is peppercorn rent. Approx £15 p/a ground fee.

What implications will buying LH really have in practicality?
We'd be looking at purchasing this, nice area, decent price, little bit work needed and possibly an extension matching next door to make it a bit more uniform.

When/If we come to sell would there be any additional things we need to be aware of.

Sorry if these all seem daft questions, just getting closer and closer to spending a lot of money and starting to question everything

Thanks in advance guys

hazyjo

Is it a L/H flat/apartment, or a L/H house? The second's rare, but not unheard of and might be harder to sell on. You mentioned building an extension which is why I asked.

Jx

NVRAM

LH 3 Bed Semi

CLAPTON

in many parts of the country lease hold houses are very common
personally I would always want to hold the freehold

Errata

If the lease is 999 years the house will fall down or be demolished long before the lease ends. Sounds like a good buy.

sonastin

In some parts of the country leasehold houses are pretty common - others less so. For older leasehold houses (which yours seems to be if ground rent is £15/yr), there is practically no difference between leasehold and freehold. Frequently the landowners don't even bother to collect the rent, if they even remeber that its owing! As houses get newer, it seems that developers started noticing it as a source of income and rents started going up - my parents 50yr old house has a ground rent of £4/yr, my 10-yr old house was about £50/yr and my brothers 3 yr old house costs £350/yr.

Richard_Webster

Generally there is not a lot of difference but it will depend a bit on where it is. For instance where I am in my immediate area of Southampton/Eastleigh it is fairly common for older houses to be leasehold but a Portsmouth solicitor might think it was really weird and might tell his client not to buy. Because of this irrational fear factor leasehold houses tend be more difficult to sell because a certain proportion of potential buyers are put off to start with.

However up north there are thousands of them so I expect somewhere like Sheffield it would not be seen as a big deal.

The main point is that you can have a nasty freeholder who will charge an arm and three legs if you admit there is an extension that needs consent and some of them write innocent looking letters asking you to tell them details about your property and then demand £500-£1,000 or more to give retrospective consent for alterations/extension.

I had one recently where they wanted £5,000 for retrospective consent or would sell the freehold for £1,200 (well over the going rate). My clients were buying so seller had little choice but to buy freehold as I could not advise my client to proceed with such a nasty freeholder involved!

vectistim

The 999 year leases generally aren't an issue, you might get the odd funnny restriction, eg: I've seen one where the lease prevented you from killing pigs in the back garden on a Sunday.

If you really must have it freehold once its yours you could contact the freeholders about buying them out. Typically in this sort of situation the freeholder would want some multiple of the ground rent in lieu of their future income plus their legal costs paid for the freehold purchase. Initially this would only be a request but once you've been living there for, I think, two years you would normally gain rights to buy out the freeholder.

NVRAM

Ah sounds good, thanks for the info guys

Onto the mortgage advisor now