what is leasehold?

rach!_3

well we have worked oiut finances and hopefully we can afford it, of course we have to sit down and discuss in a littkle more length but that will come laster today
my question is what is leasehold?? we have looked and found a property we would like, thing is its an old post office underneath
and its says it is leasehold for 199 years which runs out 2053
now can someone explain leasehold to me please also would we be allowed to rent out the old post office
or maybe even turn it into living quarters
thanks in advance for all/any advice given

lukegeorge

leases are used where more than one property is contained within a boundary i.e. flats. In your situation the leasehold is there to define the relationship between the old post office and living space above.

I'd be slightly worried about the lease expiring in 2053 as most mortgage companies require a lease to have 20-30 years to run on top of the mortgage term before they will lend. You would need to get an extension of the lease and this may cost extra (anything from £300+)
You will need to get your coveyancer to check whether the post office space is included in the lease (I doubt it otherwise it would have proabbly been a freehold property).
Every lease is different as to what it contains. There may be a ground rent payable annually and/or service charges for the upkeep and maintenance of the property of a whole. There may also be restrictions as to what you can do with the property in terms of keeping pets, loud music etc.

It's really difficult to advise you without seeing the whole lease but a conveyancer (when you instruct one) should be able to explain it to you

rach!_3

ok, well i will post the link as i am totally new to all this and maybe someone else can find something that i have missed??#
http://212.50.188.106/cgi-win/vebra.cgi?details1?src=vebra&PropertyCode=1717001/QUAYR/10105/1

Richard_Webster

The lease as is will be unmortgageable with only 46 years left so the seller will have to obtain a lease extension first or sell to a cash buyer.

If the flat is cheap that is probably the reason!

(Does anyone know who the freeholder is? If not then it could be a major hassle to get a lease extension. The cost would also be quite large. For instance I would guess that for a flat worth £100K with 46 years left, it could cost £10K plus (and it could be big plus) for an extension.)

Other point is that a lot of mortgage lenders are not happy to lend on flats over shops.


As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients

Richard_Webster

Rach,

I've just looked at the particulars - this is being sold as a shop with accomodation over. Yes it seems you would get the shop but you wouldn't get a residential mortgage on it and I suspect the points about lease length would still apply. A lender would expecting you to run a business from the shop and live above it!


As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients

lukegeorge

Looking at the link it looks like the shop and flat is for sale. The reason the lease would have been created in the first place is probably so that the flat can be sold seperate to the shop. I'd enquire whether the shop is freehold or whether the freehold is included in the price. If so then when you purchase the property your conveyancer may be able to 'forfeit' the lease (get rid of it) and you'd be left with a freehold property.

rach!_3

im sorry to sound a little dense
whats freehold?
im really sorry but all this is new to me

continualdiamond

Freehold means you own it for as long as you like and can do what you like to the place.

Im a FTB bought in Oct and my place is leasehold. I have no control over my buildings insurance company, my freeholder controls all that (its flats) therefore can't save any money with having buildings/contents ins with 1 company. I pay £10 year ground rent and just recently had to apply for permission to put in 3 double glazed windows and alter the back garden.

The fee for getting permission to do the work needed, a whopping £100. Not loads i know but money i would of had in my pocket if i was in a freehold property. I had to send letters outlining my plans to my leasehold company who then had to contact my freeholder and of course they can come back and say 'no' you can't do those plans.

Also i can only live here for 75 years, only just scrapped through with getting a mortgage and also have to live here for 2 years before i can apply to have the lease extended, plus also know will have to extend in order to sell.

Doozergirl

Freehold is where you own the property, and the land it stands on, outright.

Leasehold is where you are a tenant really, but (normally) have such a long lease that when you sell on the lease, it's value is the same as if you owned the building outright.

As already said, you won't be able to raise a residential mortgage on a commercial property, nor on anything with such a short lease. You need to be looking at 70, preferable 80+ years remaining (ie. expiring 2077 or later...)

suffolkb

At it`s simplest - freehold means you own the place and can stay there forever (if you keep up the payments). Leasehold means you can live there until the end of the lease and then out you go, unless you buy another lease. This is usual for flats although my sis has bought a leasehold house.

rach!_3

thanks everyone