Leasehold Concerns

DanGlossop

Hi, I’m just about to purchase a house in Glossop but a very large proportion (old and new) appear to be leasehold which, originally coming from the W/Mids seems quite strange as almost all houses are freehold. Reading up on this, it seems common in the north-west, but I still have concerns. I’ve just made an offer on a house which was built in 2003 and has 985 years on a lease at £90 a year. On the surface of course this sounds fine, but I want to understand what I’m signing up for.

It seems ridiculous to be expected to make an offer to “buy a contract” for a six-figure sum when I haven’t even seen the terms of the contract. The estate agent is “looking” for it, but I’m not holding out much hope and they seem to think its quite odd that I’m asking. Of course there’s been recent stories of land being sold to investment companies, rent doubling each ten years, insurances requirements, onerous conditions if any work needs doing, huge freehold costs if you tryt and buy etc. all from “newer” leasehold which I suppose this would be classed as.

The house is great in every other way which is unusual so any thoughts on leasehold?
Thanks
Dan

HouseBuyer77

A leasehold house is odd but on the other hand if it's very common in that area and that's where you want to be then you'll either have to go with it or spend a long time waiting for a freehold.

A 985 year lease is a good start especially at pretty low ground rent. You need to ascertain what the terms are around increasing it. Is there any service charge?

If there's no service charge (and no terms in the lease that allow one to be charged), no provision to increase ground rent and no common parts to worry about (maybe there's a shared road / parking that will require upkeep?) then it's pretty close to a freehold anyway.

Your solicitor would surely have to look at the lease as part of conveyancing anyway. I guess the EA isn't used to diligent buyers wanting to take a look themselves. Personally I think it's entirely sensible no point spending money and getting to the point of the purchase where a solicitor is actually looking at the lease before discovering a term in the lease you don't like.

Be sure you use a decent solicitor firm rather than one of these cheap online conveyancy places. They'll be sure to give the lease the minimum look over.

HouseBuyer77

One thing to add a major point of difference between freehold and leasehold is for leasehold you normally need permission from the freeholder to make changes to the building (e.g. Adding a conservatory or an extension). So you need to see what the terms are around modifications.

If you get a decent local solicitor they should be able to advise on how it all works. Chances are lots of houses all have the same lease so they'll be very familiar with the terms.

DanGlossop

Great thanks for this. You're exactly right that I don't want to spend money on a solicitor before having a look myself. Whilst not an expert, I'm very used to looking and reviewing contracts in my line of work, so could at least satisfy myself before paying a good solicitor to have a proper detailed look for any nuances I may miss.

The queries you note about service charge etc. - that's exactly why I expect to see the contract early - there is a shared private road so I need to understand responsibilities for that.

Thanks for the response and i'll see if they give me a copy of the lease!

eddddy

You can also say that you would only buy the property freehold - so the current owner needs to find out how much the freeholder would want for selling the freehold.

It's also possible for a leaseholder to 'compulsorily purchase' the freehold - which may be a lot cheaper. But there are lots of legal hoops to jump through, and it takes much longer, and you cannot predict the precise costs at the outset.

See: https://www.lease-advice.org/advice-guide/leasehold-houses-valuation/

HouseBuyer77

The land registry may hold a copy of the lease (I don't think they hold all leases but as it's recently built hopefully this means they have a copy) https://www.gov.uk/government/organisations/land-registry