Chances of being evicted with Leasehold.

karljt2013

I have saved up enough for either :

a) a decent one or two bedroom flat (Leasehold)
b) a run down house in a poor area (Freehold)

Obviously I would prefer a Freehold but I would consider a leasehold if I knew there was some security. For example, my income has been guaranteed for the past few years but things don't look so great moving forwards and I could end up on zero hours contracts etc without guaranteed income.

I would be paying cash for the flat so can somebody give me an idea which scenarios can lead to you being evicted from a leasehold flat even if you have paid cash for the leasehold?

Also one last unrelated question. If I bought a house where you had to go down two steps to get into the kitchen how hard would that property be to sell on the market? My Dad said it would put off nearly all buyers with kids, or disabled people etc.

Any advice on either of those points would be appreciated

marksoton

Leasehold flat for cash-Unlikely. But you'd need to keep up with bills/service charges/ground rent to avoid potential problems...

Run down house-More likely assuming you needed a mortgage. Plus if the worst happens how are you going to finance improvements?

The step thing would probably put off some potential buyers but i wouldn't say all...

KiKi

karljt2013 wrote: »

I have saved up enough for either :

a) a decent one or two bedroom flat (Leasehold)
b) a run down house in a poor area (Freehold)

Obviously I would prefer a Freehold but I would consider a leasehold if I knew there was some security. For example, my income has been guaranteed for the past few years but things don't look so great moving forwards and I could end up on zero hours contracts etc without guaranteed income.

I would be paying cash for the flat so can somebody give me an idea which scenarios can lead to you being evicted from a leasehold flat even if you have paid cash for the leasehold?

It would be very unlikely that you'd be evicted, you'd have to be taken to court, and only if you broke the lease and were outstanding a lot of money - it's a drastic action to take. Presumably if you couldn't afford leasehold charges then you'd have problems paying other bills anyway, so you'd be looking for additional work. Hundreds of thousands of people must be on leaseholds, so don't worry about it too much.

And personally, location over property every time!

Also one last unrelated question. If I bought a house where you had to go down two steps to get into the kitchen how hard would that property be to sell on the market? My Dad said it would put off nearly all buyers with kids, or disabled people etc.

It would limit *some* people (for example, wheelchair users), but then if you need a wheelchair you need to consider a lot more things such as doorway widths, hallway widths, using main stairs etc.

Personally I think it's nice to have a room or two on a slightly different level. If you're in an area with a lot of converted flats, a number of them are likely to be split level. I think it's a nice feature, certainly wouldn't bother me.

Kyresa

There are always 21 day forfeiture clauses in leases so make sure you keep up with service charges if you do go leasehold !

bouicca21

I was brought up in a house with a step down into the kitchen - which was a side extension to a 1930s end terrace house. The house has appreciated in value in line with other properties in the area.

Lioness_Twinkletoes

Be extremely thorough with checks in relation to potential works that might be required. If extensive - and expensive - works are carried out you'll have to pay towards them. Failure to pay is likely to be a breach of the lease and could lead to forfeiture. Drastic action but it does happen.

princeofpounds

It typically takes a long, long time to lose security of tenure in leasehold properties. Whilst the legal structure is based on leases, they have a status that is in many respects - though not all - closer to buying than renting (which is why most people casually talk about buying flats rather than leasing them)


Firstly, the largest on-going cost is usually, of course, your mortgage payments, not the ground rent or service charge.


So it is a bit odd that you are focusing so much on the ground rent and service charge. Because one presumes that if you can't pay that, you certainly wouldn't be able to pay your mortgage payment anyway and so would already be on the road to repossession.


If you mean you are paying 100% in cash for the property, if you are worried about the charges then either your income must potentially be close to zero at times (in which case, what about utility bills, council tax, if the boiler breaks or the roof of the house leaks) or the charges must be out of control.


Secondly, although in theory freeholders can apply to end long leases on non-payment of valid charges, the legal process takes months and typically is not actually pursued for some time anyway as the cost relative to the charges is often initially of a similar scale. If people are in financial difficulty and selling, it's often cheaper and easier for the freeholder to wait and get the charges around the time of transfer.


Thirdly, what usually happens in practice is that if you don't pay valid charges and the freeholder moves to legal proceedings, the mortgage lender starts to pay it in order to protect their own interest in the property. That gets added to the mortgage and they try to collect it from you instead.


So typically when buying leasehold the thing to check is the basis of the ground rent and service charges, any upcoming major works, and how well the block is managed.


If you think that you can't necessarily finance these modest charges, you probably can't take the risk of any kind of purchase because you have no contingency.

karljt2013

princeofpounds wrote: »

So it is a bit odd that you are focusing so much on the ground rent and service charge. Because one presumes that if you can't pay that, you certainly wouldn't be able to pay your mortgage payment anyway and so would already be on the road to repossession.

If you mean you are paying 100% in cash for the property, if you are worried about the charges then either your income must potentially be close to zero at times (in which case, what about utility bills, council tax, if the boiler breaks or the roof of the house leaks) or the charges must be out of control.

I am focusing on ground rent and service charges because I will be paying cash for the flat but things don't look good financially after that. I haven't saved all this money to hand it all over to a greedy buy to let landlord, Thats why I want to buy somewhere.

Guest101

Perhaps you need to secure some employment before buying somewhere?


Renting for 6 months would give you ample time to pass any probationary periods and secure a mortgage.


This would in turn let you buy a nice house.

benjus

Read this:

http://www.flat-living.co.uk/advice/507-forfeiture-of-your-lease

In short, it's a long, drawn out process and getting as far as forfeiting the lease is rare.