Leasehold v freehold

adonis10

^ was just about to post words to this effect. 118 years on the lease and I imagine I'll be out of it and in a freehold in 10 years so 108v118 years lease surely doesn't = much difference in valuation? Even if I stayed in for the term of my mortgage it would have 98 years left which I would hope would give me a decent selling price and a big chunk of cash to put onto a freehold.
I take on board the other points about upkeep/repairs etc., this would be annoying as I'd like to make the place my own, however nothing structural as I'm not one of those types to really be overly fussed about home
Improvements as I place other things in my like higher in a list of priorities. Yes, it's restrictive but at 29 it's what I want now, in 5 years I may wish to do freehold and, if so, I doubt I'll lose out too much, moving fees aside. I also don't intend to have kids so have no requirement for a garden, quiet road etc.

Fire_Fox

adonis10 wrote: »

^ was just about to post words to this effect. 118 years on the lease and I imagine I'll be out of it and in a freehold in 10 years so 108v118 years lease surely doesn't = much difference in valuation? Even if I stayed in for the term of my mortgage it would have 98 years left which I would hope would give me a decent selling price and a big chunk of cash to put onto a freehold.
I take on board the other points about upkeep/repairs etc., this would be annoying as I'd like to make the place my own, however nothing structural as I'm not one of those types to really be overly fussed about home
Improvements as I place other things in my like higher in a list of priorities. Yes, it's restrictive but at 29 it's what I want now, in 5 years I may wish to do freehold and, if so, I doubt I'll lose out too much, moving fees aside. I also don't intend to have kids so have no requirement for a garden, quiet road etc.

Child Free By Choice is the way forward!! :j With that number of years on the lease the value of the place will go up if the market rises and down if the market falls.

Pupnik

If you go for a leasehold make sure you find out all the costs (ground rent, insurance, maintenance) and find out the name of the freeholder (it will probably be a company) so you can research them. Take a look at the building as a whole to see what the standard of upkeep is like - does it look like the maintenance is being used well? Leaseholds can vary wildly in costs and a lot of it will be down to who owns the freehold. We ended up having to pull out of a purchase last year because of issues with the freeholder, but we are starting up with another leasehold now (after swearing off them) but have researched the freeholder much more and feel a lot more comfortable with them. Make sure your solicitor goes through the lease with a fine tooth comb and make sure you understand everything in it.

I don't think there is anything wrong with buying a leasehold - if you don't want the hassle of a house, and you want to live in an inner city it just makes sense. Just make sure to be aware of the pitfalls.

G_M

propertyman wrote: »

Well sorry members but you are both wrong, and right.:eek:

Whether you can rent out a room or not depends solely on what your lease says

Which is why I included the caveat....

You will (almost certainly) NOT need permission to rent out a room.

edit: I'm making a guess here, but I suspect that even if the lease prohibited taking in a lodger (or having a family member eg brother stay and pay rent), this would be unenforcible. Almost certainly in practice, if not in law too.

Jaynorth_2

Thing to remember is that even if you research the current freeholder he/she can decide to sell the freehold at any time and you do not know who you will end up with...

AlexMac

Echoing Pupnik's comments... and to give a practical illustration...

The last three leasehold flats I've owned had annual service-charges, payable to the freeholder, between £900 and £1,500 pa; in one case equivalent to half my then annual mortgage payments. These sometimes included a contribution to a sinking fund for future major works like external redecs or roof repairs, but I've also faced a £4.5k additional one-off bill when the freeholder decided all the block's windows had to be replaced; not bad value I thought, but then, I had the dough and agreed they needed replacing. Otherwise, could have been a problem; after all- if it's your own freehold, you decide when to replace draughty old windows!

propertyman

;

G_M wrote: »

Which is why I included the caveat....


edit: I'm making a guess here, but I suspect that even if the lease prohibited taking in a lodger (or having a family member eg brother stay and pay rent), this would be unenforcible. Almost certainly in practice, if not in law too.

Sadly no it's entirely enforceable. Won the UC ( then Lands Tribunal) case : )

seven-day-weekend

I think a flat is ideal for a singleton or couple who do not want to bother with maintenance and are not bothered about a garden. Even if it is a short-ish lease when bought, this will reflect in the purchase price and the lease can be extended.

My son bought a decent size two-bedroom flat in a very popular area last February, it was only £65k and the lease is for 68 years. He is going to extend it as soon as he can (when he has owned the flat for two years). Flats in the same complex with longer leases go for about £80k, so he should still be in pocket once he has extended the lease.

I think it is a good way for young people to get on the property ladder. My son could not have afforded a freehold house in the same area.

adonis10

seven-day-weekend wrote: »

I think a flat is ideal for a singleton or couple who do not want to bother with maintenance and are not bothered about a garden. Even if it is a short-ish lease when bought, this will reflect in the purchase price and the lease can be extended.

My son bought a decent size two-bedroom flat in a very popular area last February, it was only £65k and the lease is for 68 years. He is going to extend it as soon as he can (when he has owned the flat for two years). Flats in the same complex with longer leases go for about £80k, so he should still be in pocket once he has extended the lease.

I think it is a good way for young people to get on the property ladder. My son could not have afforded a freehold house in the same area.

Good points. I'm in a similar boat. Not single but not at the moving in together stage yet and, besides, gf only got herself a mortgage a year ago so it'd all be hassle if we moved in together, ie. she likes her flat/I wouldn't want to pay her rent/I have a good deposit etc.

The place is 165k with 118 years on the lease.

seven-day-weekend

adonis10 wrote: »

Good points. I'm in a similar boat. Not single but not at the moving in together stage yet and, besides, gf only got herself a mortgage a year ago so it'd all be hassle if we moved in together, ie. she likes her flat/I wouldn't want to pay her rent/I have a good deposit etc.

The place is 165k with 118 years on the lease.

Sounds good, just one word of caution, make sure your solicitor thoroughly checks the accounts and forward projections of the management company so that you know exactly how much you will be paying in charges over the next few years.