Question about leashold on new home

remembermee

Interesting....

We bought a Bellwayway leasehold house. It was 4 years old when we bought and are coming up to our 2nd year which means we can buy the freehold.

We have already made some enquiries as there is little information out there. Here is what we found...

Despite what people say (and what we thought) the reason our house is leasehold is not because Bellwayway chose to do this but because the land was sold to them as leasehold from the council. So when buying the freehold we would be buying from the council and not Bellway.

In further enquiries we discovered that when purchasing from the council it wouldn't cost too much - maybe £1000 including all legal fees!
The big expense is where Bellway are involved - they own the head lease. I'd never even heard of that!
Now when we made an informal enquiry to Bellway they replied that it would cost £8000. Whether this included their legal fees or not, I don't know. This was also a figure they came up with before our 2 years of ownership so they can basically ask for whatever figure they like which is why we decided to wait until after our 2nd year.

Our plan is that we shall start the purchase process as soon as we have £10,000 saved up as it is difficult to get a specific (or even approximate) price until you start the process.

It is complicated in that information is not readily available but it is certainly possible to do and if you buy knowing you will buy the freehold it's not quite so bad. We didn't love the idea at all but we loved the house and we knew that compromises would need to be made somewhere and somehow and that was ours.

inacrisis

remembermee wrote: »

Interesting....

We bought a Bellwayway leasehold house. It was 4 years old when we bought and are coming up to our 2nd year which means we can buy the freehold.

We have already made some enquiries as there is little information out there. Here is what we found...

Despite what people say (and what we thought) the reason our house is leasehold is not because Bellwayway chose to do this but because the land was sold to them as leasehold from the council. So when buying the freehold we would be buying from the council and not Bellway.

In further enquiries we discovered that when purchasing from the council it wouldn't cost too much - maybe £1000 including all legal fees!
The big expense is where Bellway are involved - they own the head lease. I'd never even heard of that!
Now when we made an informal enquiry to Bellway they replied that it would cost £8000. Whether this included their legal fees or not, I don't know. This was also a figure they came up with before our 2 years of ownership so they can basically ask for whatever figure they like which is why we decided to wait until after our 2nd year.

Our plan is that we shall start the purchase process as soon as we have £10,000 saved up as it is difficult to get a specific (or even approximate) price until you start the process.

It is complicated in that information is not readily available but it is certainly possible to do and if you buy knowing you will buy the freehold it's not quite so bad. We didn't love the idea at all but we loved the house and we knew that compromises would need to be made somewhere and somehow and that was ours.

We spoke to Bellway yesterday and was told to buy the lease it is 40 x the annual ground rent so in our case 40 x 250 = 10k

I am still hoping we can negotiate it in the initial purchase we will be going ready to purchase with no chain and mortgage in place and would be happy with only a 5% discount on the asking price if it included the freehold! I am sure that if they are selling 150 houses they would expect that a percentage of them would be sold freehold as there are people who have looked into it and dont like the idea of leasehold. I asked yesterday and was told that the freehold is owned by Bellway so hopefully won't be a problem.

Thanks

glasgowdan

Kell4life wrote: »

no maintence charges

Are there no grass areas, trees etc? Who litter picks? Sweeps the road gulleys? Maintains the swing park? Just not sure how this works.

remembermee

glasgowdan wrote: »

Are there no grass areas, trees etc? Who litter picks? Sweeps the road gulleys? Maintains the swing park? Just not sure how this works.

The council does all that work by us. And before the road is adopted (ourspecific road isn't adopted yet but the park and green areas have been) then Bellway is responsible.

remembermee

inacrisis wrote: »

We spoke to Bellway yesterday and was told to buy the lease it is 40 x the annual ground rent so in our case 40 x 250 = 10k

I am still hoping we can negotiate it in the initial purchase we will be going ready to purchase with no chain and mortgage in place and would be happy with only a 5% discount on the asking price if it included the freehold! I am sure that if they are selling 150 houses they would expect that a percentage of them would be sold freehold as there are people who have looked into it and dont like the idea of leasehold. I asked yesterday and was told that the freehold is owned by Bellway so hopefully won't be a problem.

Thanks

Thanks for this. I was not aware that, after all our investigations, it was 40 times the ground rent! That would be why they come up with the £8k for us then.
By the way, our ground rent was frozen for 5 years and I believe all the legal lease documents say it can only go up with inflation.

Slightly disappointed in that 8k is a lot compared to what others pay. It means that for us the total bill; purchase head lease, the freehold from council and then 3 times the legal fees will be rather expensive. We had better hold off with that conservatory idea lol

Make sure that you get all the information you need from Bellway before purchasing because I found it difficult to get any information from them when we moved in because they don't actually care once they've sold. Also, be aware that they may also sell the freehold to someone else.... as in our case this has just happened! On the plus side it meant no one claimed the ground rent for 6 months and no one asked for a backpayment - there's £100 towards the purchase:rotfl:

In terms of negotiating on purchase price - they are notoriously difficult - have you purchased brand new before? You'll have mor chance in offers with flooring, extras and/or legal fees rather than a discount in house price (which can very definitely be worth having these offers). And if you want to negotiate freehold I would suspect you'll not get any discount at all.

But do let us know how you get on with it all!

Richard_Webster

The posts on this thread illustrate why buyers should boycott new build leasehold houses. Buy a second hand freehold house they are generally a lot cheaper!

thriftylass

I don't quite understand why anyone would buy a lease hold unless of course in certain areas that's all that's available I guess. But the way I see it the house would never really be mine as I would have a landlord and still pay rent. So even after paying off the mortgage the house and land is not mine really, no?

remembermee

thriftylass wrote: »

I don't quite understand why anyone would buy a lease hold unless of course in certain areas that's all that's available I guess. But the way I see it the house would never really be mine as I would have a landlord and still pay rent. So even after paying off the mortgage the house and land is not mine really, no?

Not really no. The house is yours and you pay a small amount of rent (peanuts in comparison to renting - ours is £200 a year). Yes it is annoying and something we would have preferred not to do. However, we were aware that we could not have everything that we wanted and the house was a very good buy and in a beautiful area. It was a compromise we were prepared to make after thinking carefully about it... but we were (and still are) prepared to buy the freehold. No one else has bought the freehold by us as they don't see the point, which I think says quite a lot. But for our peace of mind it is certainly something that we shall be doing.

So you can buy a leasehold house with the intention of buying the freehold. Therefore the house is solely yours . No one can prevent you from buying the freehold. You do need to go into it with your eyes open.

Most new builds are not leasehold unless this is something new they are slowly introducing. In our case the land was not owned by the builders and they bought the headlease to it.

inacrisis

That is why we would like to get the freehold included. it wuld be 10k and then legal fees in addition,

My friend is an EA and says that most new builds these days (near me anyway) are going leasehold. The saleswoman even said as soon as all the houses are finished Bellway will sell the leasehold to an investment company.

The annoying thing about looking at second hand homes is that it doesn't tell you if there are leasehold or freehold? So we would literally need to contact to EA about everyone. I know a lot of people have said older houses arent leasehold but pretty much all my family have leasehold houses ranging from ones built in the 1800s up to the 1970s.

Good job we arent in a rush to move

I still think negotiating will Bellway to have it thrown in is the number one option as we would like a conservatory too and dont want to have to faff around getting permission to build this!

Thanks