flat = leasehold ?

smacky

Hi Guys,

i have been browsing rightmove.co.uk and came accross some properties which are converted from house into grond floor/first floor

When the listing appear as FLAT , will it always be leasehold ? as most of those properties dont say anything about remaining lease ?

any suggestions will be appreciated !

holly_hobby

Flats will generally always be leasehold (but there are freehold ones to be found), as really to do with the ease of managing/splitting costs between all lease holders for the cost of maintenance to communal areas.

The communal areas will be maintained by the freeholder or management co.

Take care to carefully review the terms of the lease before you pch the property.

H

olly300

Before you even put an offer on a flat ask the current vendors who owns the freehold and how they pay for maintenance of the property. Then if they have a freeholder ask them how much last years service charges where. If they refuse to be open about this then look at somewhere else as it can indicate an issue with the management company/freeholder.

This is because the leasehold/freehold system for flats in England is a mess.

For starters as a rule of thumb mortgage lenders don't like freehold flats as that means there is no-one who is ultimately responsible to take care of the structure of the building, buildings insurance and the maintenance of communal areas.

However you can get flats that give you a share of freehold. What this means you need to co-operate with the other freeholder(s) in care, maintenance and insurance of the building.

Depending on how many flats there are this may be in the form a of a management company, which every flat owner is a member off. Or if there are too few flats that share the freehold i.e. 2 then the joint freeholders just have to agree amongst themselves how to manage it.

The problem with these 2 methods of holding the freehold is that if there are arguments then it can be horrible. The advantage is that if you get on you can minimise costs - for example do the decorating yourselves.

There are also flats that are leasehold where there is a freeholder but this freeholder delegates the responsibility of maintaining communal areas and the structure of the building to the leaseholders. So in effect you pay little or no service charge but if the roof needs doing you and the other leaseholders have to sort it out and pay for it yourselves.

Then there are the traditional leasehold flats with a freeholder who is normally a management company. (Companies are just legal entities and there can be just one person running it.) While often this works fine there can be problems due to some freeholders using it as a cash cow by charging extortionate service charges and do no work for the amount of money they are charging. Plus use legal loopholes to rip leaseholders off in paying for insurance.

smacky

Hi,

Thanks for your advice . if you could look at this links some one of them look like council building , do u think even these have problems with leasehold ?

http://www.rightmove.co.uk/property-for-sale/property-30500119.html


am more interested in properties similiar to this 2nd link

http://www.rightmove.co.uk/property-for-sale/property-30208291.html?premiumA=true

any advise would be appreciated

regards

dimbo61

The first property has no pictures of the outside!
the second does ! and also has 3 bedrooms plus outside space, kitchen looks dated but ok for now
I would read all the paperwork very carefully and look around the area carefully
Schools, transport links,parking etc

smacky

The first property is like a council 2 floor building with a block of 6 flats !

The 2nd property : agents have confirmed as having 900 years lease remaining !

holly_hobby

smacky wrote: »

Hi,

Thanks for your advice . if you could look at this links some one of them look like council building , do u think even these have problems with leasehold ?

Problems with the lease will be revealled upon its review (get the est agt to give you some details such as remaining term, maintenance costs etc).

Ex-local authority property (of any type)- will typically always have a lower market value than a comparible privately build property in the same area.

Flats in general

Any access to os space/parking that comes with the flat will generally increase the value, and certainly its future marketability should you wish to sell.

Lower number of storeys the better

High rise - can be an issue with lenders (esp os of London)

Flats are traditionally a more niche/smaller market than that of traditional houses - so make sure to increase your chances of re-sale (and for your own needs) that it has good public transport links (esp if it does not have allocted parking), good local shopping area, schools etc.

Always avoid flats over commercial prems - yes you can get a mge on them, but it can be difficult for various reasons, and typically harder again to sell on (dependant on area)

ALWAYS, ALWAYS, ALWAYS - read the lease and ALL its small print, once, twice, .. ten times to ensure you are aware of ALL its terms, good and bad - if you don't understand anything get professional advice - its imperative you go into any lease hold situation with your eyes wide open .

Hope this helps

H

smacky

Thanks Holly,


Yes i guess these are various reasons why people fear for going with flats i guess

however atm my situation is that i can probably get a flat easily rather then stretching for a house which is not an ideal one for me . and may be in another 5-6 years i could look for a ideal house i want after selling the flat.

the only thing concerns me about flat is if it ex council building or still with them as freehold , there are less chances of them exploiting where as if its a purpose built flat then the individual owner could demand un reasonable costs.

As its first time am looking at buying , getting more and more confused about the same.

if someone could confirm if i have got this right when i am trying to buy a flat , i should be looking for :

1> remaining lease
2> ground rent
3> any annual expense ?
4> good links to transport/school etc to assess it future re sale value

am i missing anything important ?

thankyou everyone for you input !

holly_hobby

Ex local authority - all flats in the building will have to be owner occupier - this is really in respect to maintenance of the property by its occupants and desirability/market attractivness for future sale. (won't expand further as to why, but I am sure you can appreciate what problems may come with mixed occupied local authority & owner occupied property)

Freehold flats, mean that the freeholders as a unit, hold the building and its land. In that case, to save problems of common areas, all owners should agree to pay a premium for a the employment of a maintenance co to take care of the communal areas and grounds, or agree as to how such areas will be maintained and serviced between themselves (areas such as gardens (os) area, plumbing, drains, roof etc .. etc) .

Min of 99 yrs remaining on a lease at time of mge is ok
Ground rent & maintenance - fees, how and when they may be increased should be detailed
Decent area, transport links etc... etc.. all add desirability to the propety (which should help in an easier future sale subject to market conditions etc)

Hope this helps

H

smacky

Thanks holly,

Am viewing some property coming week so hopefully will have more information

once again a big thanks to everyone for valuable advice

smacky

Hi guys

have a quick question as am viewing 2 leasehold properties tomorrow

I believe apart from annual exp and grnd rent, details as to who pays for repairs , its % etc are genrally detailed in lease. do vendors provide those information while viewings ?

I have been informed about one of the property that am viewing tomo, that it has 900 yrs lease left is it possible. i have hear upto 125 but 900 ??


thx