Buying freehold house that turns out to be leasehold...

imanc

Hey,

I'm buying a house in Manchester for £105k. The estate agent stated that the property was freehold, and I was keen at the time to avoid anything leasehold. It seems that for most it's a none issue and incurs a minor ground rent, but it seems to be another layer of complexity/liability that I wished to avoid.

Anyway, my solicitor has now determined that the house is leasehold, not freehold. So I'm awaiting further details, e.g. length of lease, and ground rent, etc. The estate agent said that the seller was not aware either, as the house has gone through probate.

My question is, how does leasehold tend to affect a house price? Would the house be any less sale-able in the future due to it being a leasehold? I'm wondering if there is now room for negotiation due to inaccurate details, and if so by how much? Does anyone have a rough idea of what it would cost including legal fees to buy the freehold, assuming a typical arrangement, e.g. nominal yearly fee and 999 years on the lease? The leasehold agreement is dated 1894!

Cheers,
imanc

cattie

If you go to this site it should give you all the info you need. http://www.lease-advice.org/wizard/?step=7

Somewhere on the website you will find a calculator that will enable you to work out the cost of buying the freehold.

A leasehold house won't necessarily be worth less than a freehold one, but will likely be less appealing to some buyers. You have nothing to lose by offering less for the property that you originally thought was freehold.

If the house has a very long lease of say 999yrs, then this is considered a virtual freehold & often little to be gained by buying the freehold unless savings on ground rent & service charges merit it.

chappers

As above we recently sold a house that was bequeathed to my wife it had a 999 year lease and the freeholder wasn't traceable anymore. Our solicitor said that the property was essentially freehold now.

Typhoon2000

If its a house in an private estate then it's like like to be leasehold with minimal ground rent and a small service charge for street cleaning or CCTV etc.

Richard_Webster

In most cases with a 999 year lease and very low ground rent if you can contact the freholder it is going to cost between £750 and £1500 all up (inc costs) to buy the freehold.

In a few cases you have a toxic freholder who will think of ways of getting money out of you e.g. for approving extensions requiring approval under the lease. One such company I have encountered wanted £5K for this!

In many other cases the freholder is not contactable because it has not been worthwhile trying to colelct small amnoutns of ground rent like £2-3 pa for many yaers and when old freeholders died their family couldn't be bothered to faff around trying to collect the rents and contact was lost. In that case you can eventually force the sale of the freehold but you have to go through the courts and the LVT and the legal costs invovled generally mean it is not worth doing.

What you can do is say to the estate agents that it would cost you around £1,500 (go for high figure) to buy the freehold so you want thta off the price because the seller said was freehold when it wasn't.

If the lease is much shorter - 99 years or 125 years form start then you ahev to be much more careful because the price of the freehold will generally be much higher and the precise length of the lease will be important. In the real world the difference between 800 years left and 900 is peanuts but the difference between 70 years and 80 years is signficant.