Shared ownership & Freeholders

Woolwich_Kim

Hi,

I know there have been a few queries on shared ownership but I've not really found the answers I'm after.

I hope to be a FTB this year. After calling London & Country (from the free FTB guide here), I am looking at buying a property of around 180k which includes my deposit.

I live and work in SE London, looking around anywhere in London there doesn't seem to be any decent properties available so I'm not looking on the outskirts of SE london (bromley, croydon). By decent I mean with enough storage room (rather than just 1 bed, 1 kitchen, 1 lounge & 1 bathroom only) or a lease long enough (around 70 with my budget) for lenders to lend, I would need over 100 years.

I have two questions.

1. It is not impossible to buy me a decent flat whether purpose built (not likely as they are more pricey) or conversion. My main issue is knowing about the freeholder. I have heard many bad stories about freeholders making repairs or replacements then billing the homeowners of the flat or steeply increasing service charges etc. If I found a flat I like, what should I be asking about the freeholders and what sort of research should I do? e.g. if I ask for previous 5 year history of service charges or building works, do they have to release this etc. I have a colleague who got stung and bullied to the point of selling her flat for cheap just to get away from a freeholder and now vows to only buy ex council.

2. Shared ownership. This is another consideration as I'm more likely to find somewhere decent with this scheme. However, I don't know anyone who has done this or is currently in this scheme. So this is more aimed at those who have personal experience of this. From research, I understand it can vary between housing associations. Also from reading, I get the impression that it's designed to make it extrememly difficult to ever own 100% despite it being advertised as possible. What I'd like is named HA's from people please. Reading some past posts of shared ownership some have had good (& bad) experiences but didn't mention which particular HA it was.

I currently live in a HA house with my parents as council tenants (Hexagon housing assoc), but from their website you are given 2 steps to own your property outright, if after 2 steps you don't own 100% then you never will. I've looked into L&Q too and while they sound great, I'm worried about what they are NOT telling us.

chanz4

look at other brokers also, l&c dont seem to have access to all.

cattie

Regarding flats, avoid ex council at all costs! Your friend must be mad to have the attitude they will only ever consider ex council in future as ex council flats tend to have the most ridiculous high costs when either major or even minor repairs or upkeep need to be carried out to the exterior or common parts.

Don't listen to too many scary stories told by others regarding freeholders. I'm not saying there aren't bad or useless ones, but I've lived in 3 or 4 leasehold flats & maisonettes & have never yet come across a bad freeholder or one out to swindle flat owners in any way they can.

Often the worse freeholders seem to be companies from what I read on these boards. There are a few that some posters warn others to avoid. I think Trinity Estates is one name that has cropped up more than once.

All flat owners have to contribute towards the upkeep & repairs when living in a flat or maisonette. Some will pay an amount through service charges that will contribute towards a sinking fund for when any repairs or works are needed. Others may not have a sinking fund, so that when work or repairs are required, all leaseholders have to contribute their share of the monies to pay for the work. It is the freeholder's responsibility to arrange repairs or maintenance, but not their responsibility to foot the bill.

It's the same with buildings insurance, the freeholder usually arranges for the policy to be taken out, but leaseholders have to pay the cost of the policy, usually via their service charge.

Your solicitor will enquire about any likely works within the following 5yr period when buying a flat.

You could ask the vendor if they have any details of works carried out in the last 5yrs. Some might have this information to hand, others might have just binned the information once the work was done & paid for.

Sometimes asking neighbours who own some of the properties questions about their experiences of living there is a good way to find out whether they think it's a decent place to live & well maintained.

My current flat has a lease of 999yrs, which is considered virtual freehold. This sort of set up would be ideal for you I think. You definitely are on the right track in thinking a short lease is not for you. You should not consider anything lower than 80yrs as once a lease gets to under 80yrs it becomes more costly to renew.

I've no experience of shared ownership, so can't give any advice regarding those sort of properties.

Woolwich_Kim

chanz4 wrote: »

look at other brokers also, l&c dont seem to have access to all.

Thanks,

I'll assume when I get to registering with estate agents they'll want to convince me to visit their broker too. I don't rule that out but I reckon most lenders will lend roughly the same amount anyway.

Woolwich_Kim

cattie wrote: »

Regarding flats, avoid ex council at all costs! Your friend must be mad to have the attitude they will only ever consider ex council in future as ex council flats tend to have the most ridiculous high costs when either major or even minor repairs or upkeep need to be carried out to the exterior or common parts.

Don't listen to too many scary stories told by others regarding freeholders. I'm not saying there aren't bad or useless ones, but I've lived in 3 or 4 leasehold flats & maisonettes & have never yet come across a bad freeholder or one out to swindle flat owners in any way they can.

Often the worse freeholders seem to be companies from what I read on these boards. There are a few that some posters warn others to avoid. I think Trinity Estates is one name that has cropped up more than once.

All flat owners have to contribute towards the upkeep & repairs when living in a flat or maisonette. Some will pay an amount through service charges that will contribute towards a sinking fund for when any repairs or works are needed. Others may not have a sinking fund, so that when work or repairs are required, all leaseholders have to contribute their share of the monies to pay for the work. It is the freeholder's responsibility to arrange repairs or maintenance, but not their responsibility to foot the bill.

It's the same with buildings insurance, the freeholder usually arranges for the policy to be taken out, but leaseholders have to pay the cost of the policy, usually via their service charge.

Your solicitor will enquire about any likely works within the following 5yr period when buying a flat.

You could ask the vendor if they have any details of works carried out in the last 5yrs. Some might have this information to hand, others might have just binned the information once the work was done & paid for.

Sometimes asking neighbours who own some of the properties questions about their experiences of living there is a good way to find out whether they think it's a decent place to live & well maintained.

My current flat has a lease of 999yrs, which is considered virtual freehold. This sort of set up would be ideal for you I think. You definitely are on the right track in thinking a short lease is not for you. You should not consider anything lower than 80yrs as once a lease gets to under 80yrs it becomes more costly to renew.

I've no experience of shared ownership, so can't give any advice regarding those sort of properties.

Thanks for this, my colleague believes councils are more likely to be upfront and honest. When she got stung by her freeholder, she found other free holders were reluctant or slow when showing her records of previous sales, charges etc.

Of course if I were to ever consider a ex council, no way would I consider a high rise or anything rough looking.

propertyman

Have a look at this thread

https://forums.moneysavingexpert.com/discussion/4754355

The trick is that you need to choose the flat and then have a good look round the building and grounds to see what needs doing as that will affect what costs might likely arise which lead to surprises.

Asking questions, at the outset, not later as part of the conveyancing process, about the age of installations such as wiring lifts communal boilers etc and expenses over the last few years and in future will indicate how things are looked after and in turn might lead to bills in the near future.

Realopinion

Woolwich_Kim wrote: »

Hi,

My main issue is knowing about the freeholder. I have heard many bad stories about freeholders making repairs or replacements then billing the homeowners of the flat or steeply increasing service charges etc.

It sounds like you are well versed and have already done a lot of research. An informed buyer is a safe buyer; always remember that and it is especially true when buying a leasehold property.

When you buy a leasehold property you will buy a "Leasehold Pack / Management Information". This pack of documents is supplied either by the Freeholder or a Managing Agent on behalf of the Freeholder.

Within the pack there will be detailed the following:

Service charge
Ground rent
Reserve fund
Major works completed and planned
3 years accounts
Specific requests from solicitor

In answer to you question, if there is any planned major works then they will be listed in this document. With that said, after a year, there may then be planned works which you wouldn't be aware of.

Major works can be either viewed as essential to keep the property price high as the communal parts cannot be allowed to get into disrepair as they will lower the property value.

As a leaseholder you do have rights under the Leasehold Reform act so make sure you understand your rights. If there is major works suggested and the quote for works seems excessive, get 3 other comparable quotes for works and then provide these to the Freeholder/Managing Agent. Don't just complain about the cost, be proactive and find a better solution.

At the end of each year, if you haven't heard of any planned work, don't think phew, think why not. Ask what plans they have to keep your Freehold in a sell-able condition. The more involved you are the more the Freeholder will have to work with you.