Persimmon - Lake View

martinsurrey

BBH123 wrote: »

I'm sorry Martin i just don't agree.

with what?

if you can show me I'm wrong on what I said I'll be happy to stand corrected.

I am 100% against crazy 10-year doubling ground rents, but they are the exception, not the rule.

Leaseholds have been part of our property buying landscape for hundreds of years, and even if they ruled tomorrow that all houses had to be freehold, the management charge and covenant issues wouldn't go away.

all it would remove would be a £150 a year rpi increasing charge, which would be valued at leasehold tribunal at around £4-5k.

jdc23

As part of the discussion I had with my Solicitor I asked what they would estimate the cost to purchase the Freehold to be, they estimated between £3-5k, in line with what martinsurrey is quoting. But even at this value it would only ever make sense to purchase it if we thought it would add value to the marketability of the property. If viewed purely financially it wouldn't make sense.

[Deleted User]

Do some research OP on here and also checkout the FB group National Leasehold Campaign , it has thousands of members caught in the desperate trap of Freehold houses that either can't sell, the quote for the Freehold has sky rocketed ( most were quoted 3 -5 k at point of sale and in reality were being asked for £8k upwards after the developer has sold on without the houseowners being advised and numerous other problems.

If you do your research at least you would have been warned so you are in a far stroinger position than most of them because you can walk away or take the risk but you are going in with yours eyes open.

If you want to buy a house why not just buy a normal Freehold house over which you have total control.

With so many people divuilging real horror stories its not a risk I'd take and I certainly have no vested interest in what anyone does or doesnt buy, I dont work for a developer trying to promote a good slant on all this to keep the sales rolling in.

jdc23

BBH123 - Thank you for your suggestions, I believe I have done a good amount of research and understand the situation, I will take a look at what you mention though.

I am assuming that worst case scenario I will never purchase the Freehold to the property as it will just not make financial sense to do so.

Our ground rent will be £150 and that is fixed for the first 10 years, it then increases in line with RPI.

If I average RPI over the last 30 years I come up with the figure of 3.35%.

Therefore, our average annual increase will be around £6.

On this basis in 20 years time our ground rent will have increased to around £208 annually. And we will have paid around £3300 in total over that 20 year period.

Because of this, if the lease is valued at anything much above £3.5k it wouldn't be worth ever buying. Therefore, I don't really see it matters who owns the lease or what they choose to value it at. When we come to sell we will simply sell the property again as Leasehold to a buyer who accepts that an annual fee of £150-£200 is just part of the cost of living there.

sparky130a

I "own" a flat so accept the leasehold status that comes with it.

Were i to purchase a house i wouldn't find this acceptable at all.

OP, i'd just check what else comes with the lease. As for lake views, i wouldn't bet on it....

Zero_Gravitas

jdc23 wrote: »

As part of the discussion I had with my Solicitor I asked what they would estimate the cost to purchase the Freehold to be, they estimated between £3-5k, in line with what martinsurrey is quoting. But even at this value it would only ever make sense to purchase it if we thought it would add value to the marketability of the property. If viewed purely financially it wouldn't make sense.

If the freehold is really £5k, then buy it now and have done with any future worry. If they won't sell you the freehold of a house, then you really should be asking yourself why very seriously indeed.

PS: for the record, I wouldn't buy a leasehold house under any circumstances.

aneary

I get a new solicitor.

silvercar

I would be checking if the lake views are direct views or involve periscopes.

Sounds like you have researched the lease issue.

AnotherJoe

martinsurrey wrote: »

how any times does it need to be said.

the price will be set independently by a leasehold tribunal, if the owner doesn't agree a price with the buyer.

the price is set by them with reference to the present day value of the income stream, and at RPI increases that income stream isnt that valuable.

again, showing that the people making the biggest noise, don't understand the process.

You are ignoring other income streams we've seen mentioned here in some leaseholds plus the general level of noise causing an issue even if there isn't a "real" one.

Want to sell your house? Pay up.
Add an extension? Pay up just for asking for planning permission, and pay up when you extend.
Change the colour of the front door? Pay up.
Put a shed in the garden? Pay up.

IMO leasehold houses are all likely to be tarnished with the same brush as a result of this and related issues, and knock a big wedge off when you come to sell.

Prospect; "Oh, I see that the freehold is £20k so I want that knocked off your price"
OP; "But my price is for a leasehold"
Prospect; "Tough I'm comparing with other freehold houses that dont have this issue hanging over them"
OP "sling your hook then" (unspoken; "like the three others before you")
OP's partner : "Didn't I ask if there would be a problem reselling ..........."

billy_goat

jdc23 wrote: »

As part of the discussion I had with my Solicitor I asked what they would estimate the cost to purchase the Freehold to be, they estimated between £3-5k, in line with what martinsurrey is quoting. But even at this value it would only ever make sense to purchase it if we thought it would add value to the marketability of the property. If viewed purely financially it wouldn't make sense.

I make it £3.1k for the value of the ground rent on a 7% discount and assumed 3.5% RPI.
Also assuming you have a 999 year lease, thats 0 for the loss of future value for return of the property.

Add 1-2k for solicitors and you are in the same ballpark.

But I don't necessarily agree with your maths regarding when it is worth buying out and the cost per year. Theres a bit of a misconception over the value of the ground rent clause, the real cost is the cash payment + increase in the cost to buy out the clause year on year. When I say buyout, I am talking lease extension, though freehold buying would presumably incur the same costs.

i.e in your case I make it 3112 to buy out (the cost of the ground rent clause) in year 0.
Year 1: Cash paid = 150, buyout = 3185
Year 2: Cash paid = 300, buyout = 3263
Year 3: Cash paid = 450, buyout = 3347
...
Year 10: Cash paid = 1500, buyout = 4145

So basically your cost to buy the agreement out would also be increasing by approx £75 / year + interest, ergo it works out that you are more looking in the region of a charge of £225 + RPI per year. (the fact I am saying the £75 seems to increase as well is an observation, not proven).