leasehold or freehold ??

where2start

I know this may sound a really stupid question but as a first time buyer could someone explain to me what freehold /leasehold mean ? secondly is it advisable to go through an estate agent to get us a mortgage ?

seven-day-weekend

FReehold is when you own the land outright.

Leasehold means someone else owns the land your property stands on and you will have to pay them ground rent. Leases are for a number of years (99 say) and if you buy a property when it is thirty years old there will only be 69 years of the lease left.

where2start

many many thanks you have explained it so well!!! (simple english)

where2start

thanks to first part of the question any ideas on the mortgage with estate agent ???

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where2start wrote: »

I know this may sound a really stupid question but as a first time buyer could someone explain to me what freehold /leasehold mean ? secondly is it advisable to go through an estate agent to get us a mortgage ?

Try and find an independent mortgage broker important who has all of the market available to them and also who doesn't charge for their services. They receive their commission/fee from the lender.

When looking for a flat for example as all are leasehold having a share of the freehold is desirable. No ground rent and the lease extension isn't an issue or such a costly exercise.

where2start

thanks - just thought it would save us all the stress having to find the RIGHT broker etc everything just so new to us and seems so difficult , but willing to take on board your advice will search for an independant broker as you said.

PJD

Be aware that renewing the lease is a lengthy and costly process. Typically thousands of pounds (dependant on many factors). If the lease is below 80 years, an additional law is introduced (marriage value) - long & short of that law is that it will cost a lot more to renew the lease than if it was above 80 years.

Leasehold also means there will be some sort of management agency involved to which you will have to pay yearly maintainance costs to.

I had a bit of a nightmare with my last leasehold property (I knew diddly squat about leasehold before I brought it) - as a result I would personally never buy leasehold again!

Swarbs

I've tried a couple of online brokers, London and Country and Kiss FS. Pop 'em in Google and you shgould find them easily.

Kiss FS is great as it's quite a small firm, only a few advisors, so you get very good personal service, and they can search the entire market. L&C is bigger, so it can be a bit difficult to get hold of the person you want. On the plus side, L&C has more resources so they can get 'special' mortgages easier, i.e. if you have a guarantor etc.

I'd advise against going with a broker recommended by an estate agent. The few I've been recommended by agents tend to have quite a hard sell, often charge fees and don't get you a better deal than the online ones. Also, I've heard rumours that they will provide details of the mortgage they arrange to the agent, i.e. if you can afford a £200k mortgage they'd tell that to the agent even if you only want to spend £150k. This can work against you when you're negotiating for a price.

Best of luck!

Swarbs

P.S. Leasehold also often involves paying a service charge, for maintenance, buildings insurance, lifts, groundskeeping etc. This can often be quite high, so it pays to bear it in mind when calculating the monthly cost.

EdInvestor

In general, leasehold applies to flats and freehold to houses. This site has loads of good info about leasehold:

https://www.lease-advice.org.uk

where2start

thanks to everyone that replied, will try to see if i can find a broker instead of going through estate agents , and bear in mind everything that has been suggested to me on this thread.