Buying a Leasehold flat - any advice and what should I offer?

MrPayless

Any advice would be appreciated!

My sons a first time buyer so he needs to know what to watch out for etc but also, what should we offer? Its up for £120k which is about right for the place.

We dont want to lose it buy offering too little but on the flip side, we dont want to pay anymore that we need to.

Thanks

Bun

Hello!
I can't really advise on price as most flats tend to be leasehold, but you could ask the estate agent if they have a copy of the lease already. A good one will have one. Then if there is anything you can bargain with, do so.

From experience I would look out for:

How are you going to use it - if your son is later planning on renting out a room or setting up his own business there, will the lease allow him to? If so, who can he rent to or does a 'residency only' clause exclude renting to students (even one room)? This one nearly lost us our last sale because the woman buying our flat caught it late, but her solicitor didn't!

What are the charges? There may well be buildings insurance (check this is competitive) and admin charges, together with ground rent (nominal) that a management company will request. Find out in advance if you have the option to pay monthly rather than have to find a large sum in January.

Is your son covered if there are repairs that are required and somebody else in the block is behind with their accounts?

How often do they do repairs and how much notice do you get? Is there a sinking fund already set up?

Who exactly is the freeholder? Could be a problem requiring insurance policies etc if he/she goes awol.

Sounds scary, but we were looking to buy a freehold flat, and the prospect of having to chase for buildings insurance and repairs money yourself was worse. Also now the rules are much tighter - can't remember the site but if you search for leasehold regulations they now give you a lot more rights - rights to contest charges, buy share of the freehold, that sort of thing.

Hope this helps!

MrPayless

Bun

You've just been thanked! Anymore advice from MSE fans most welcome!

theGrinch

also determine the length of the lease. anything shorter than 90 years would worry me froma resale point of view. also consider ground rent and service charge.

Woby_Tide

make sure you check how long is left on the lease, shorter leases( i.e. under 75 years in some cases) make getting mortages harder(also less likely to need to pay to renew the lease whilst you own it. the longer the lease when you buy, the longer the lease you have to sell when he eventually moves as next buyer will be in same boat. Also keep an eye on ground rent, our old flat rather than gradually increasing ground rent by a percentage per year say, instead was £100 per year for 25 years, then £1000 for next 25 years, if you are buying a lease at 77 years (from original 100 year lease) could be nasty surprise in a couple of years. Also just keep an eye out for anything relating to actually living there(can't think of actual words) but ours contained clauses about having to have all floors carpeted to avoid noise, pets, lodgers/letting rooms as previous poster mentioned, also we had a clause we weren't allowed to have drying clothes visible from windows !

Bun

Thanks MrPayless!

In terms of a short lease, you could negotiate this. One of the new rules is that after two years of residency you have the right to ask for a lease extension. So a new owner doesn't have to wait, you are allowed to get the existing owner to put the application in and then you proceed with the actual extension. Maybe could help mortgage-wise.

I found the website I mentioned earlier - https://www.lease-advice.org

Very helpful!

Good luck.