Leasehold or freehold

maxhunis

HI All,

Husband and i want to get into the property ladder as soon as possible, we have our deposit saved of 30k but we just need a little more for all the costs attached solicitor fees etc.

We saw a mortgage broker and we were told to only look for flats as houses would not be affordable. Ii have my reservations for buying a flat simply due to to the leasehold and the fact that you also have to pay towards and refurbishment or repair work that occurs in the building which can be quiet costly i hear.

Purchasing a house as everyone know and i am aware that its better because non of the mentioned fees would apply such as renewal of the leasehold and the repair works etc. I dont know what to do, whether to go for a leasehold flat or just wait for a house, but the house prices in our area are about 450k for a three bed. i am afraid to wait any longer because we really dont know whats around the corner with brexit and the house prices.

your help would very much be appreciated

thanks

csgohan4

If you can't afford to buy a house in your area, you would need consider either moving out of the area if possible or a flat. Unfortunately as you have pointed out leaseholds have their own issues, ground rent, service charges e.t.c.






That's why I moved out of London, I bought a large house for the price of a box room flat in London


You need to be realistic with your budget, how much combined income and debt do you have?

alanobrien

perhaps look for a maisonette with full freehold or share of the freehold that will give you more control. There are some flats that are sold with share of freehold (usually conversions). It will reduce your choices as most are just leasehold though.

ACG

I am surprised a broker told you to only look at flats.
I regularly have conversations with customers about what is affordable in terms of how much they can get - not what they can buy.

I have posted this story a few times, but my first home I purchased 5 years ago. I could not afford a house where I wanted to live, so I moved 4-5 miles down the road and bought a house which belonged to a 92 year old man. I spent a few years renovating the property and having a small mortgage. When I come to sell up, I made around £50k after costs which gave me a larger deposit for a house where I actually wanted to live.

Tiglet2

csgohan4 makes good points. My son is purchasing a leasehold flat even though I advised him to go for a freehold property if at all possible. Unfortunately a freehold property round here is not affordable and he didn't want to move out of the area. This is the choice you have. It gets you on the ladder and you can build up your equity in order to move on to a freehold property next time. Share of freeholds are not necessarily any better. Most are management companies are appointed by the freeholder and you are simply buying one share of the management company which will still not give you a lot of input into maintenance charges and repairs. Similarly a share of freehold (where you do part own the freehold, along with the other freeholder/s) can be fraught with difficulties when you have to jointly pay for repairs such as the roof or foundations or grounds, if the other freeholder will not contribute towards the cost or can't afford to contribute at any given time.

hazyjo

I doubt there's much harm in delaying a year or so in the current market.


I would also suggest looking at different areas.


Lots of us start out with leasehold, but most want to eventually buy freehold. Agree share of freehold can have its own probs - plus you still have a lease so usually still rules, regs and restrictions.

alanobrien wrote: »

perhaps look for a maisonette with full freehold...

Never heard of that. Surely that would make it 'a house'?! Do you mean someone above or below still? Wouldn't that be a problematic 'freehold flat' which might be hard to mortgage? Or involve a flying freehold?

SeasideSally

maxhunis wrote: »

Ii have my reservations for buying a flat simply due to to the leasehold and the fact that you also have to pay towards and refurbishment or repair work that occurs in the building which can be quiet costly i hear.

My husband and I have a leasehold flat and freehold cottage. As far as maintenance is concerned, we've spent a huge amount of money on the cottage and next to nothing on the flat. A leasehold flat in a building that's in excellent condition is a better bet than a house that needs a lot of work, as long as the building is run properly.

Whether you get a share of the freehold or not, a lot depends on the other leaseholders in the building. In a neighbouring building here, each leaseholder has a share of the freehold. They have full control over what is spent, and they have managed to run the building into the ground because they can't even agree on a gardener to cut back the hedge, let alone major repairs for the roof.

From personal experience, I'd say the biggest problem in flats is the fact that some very silly human beings live in them. Silly human beings live in houses too, but they don't generally get to delay repairs to neighbouring properties by nit-picking for a year or three, before failing to make a decision about anything at all.

Cakeguts

I have posted this before on here. When I wanted to buy my first house the area that I lived and worked in was much too expensive so I moved jobs to somewhere about 50 miles away where house prices were cheaper. I could have commuted but decided to change jobs as well. It helped that the salaries were the same for both areas. Where I moved to I could afford a 2 bed semi.

bouicca21

Blocks of flats occasionally need repairs, so do houses. Actually I find it quite reassuring that if anything does need repair the management will fix it and I don't have to try and find a reputable tradesman.

What you do need to do with a flat is to get hold of the lease early in the process and read it carefully. What are the terms for ground rent? How long is the lease? And I'd also be asking to see back demands for service charges.

alanobrien

hazyjo wrote: »

Never heard of that. Surely that would make it 'a house'?! Do you mean someone above or below still? Wouldn't that be a problematic 'freehold flat' which might be hard to mortgage? Or involve a flying freehold?

Typical maisonette is like a house but two properties one ground floor one first floor with independent entrances and often garages driveway and garden - at least mine was. The freehold is shared between both dwellings and both have leases linked to the freehold to share cost of maintenance etc. its very common and no issues with getting a mortgage.

hazyjo

alanobrien wrote: »

Typical maisonette is like a house but two properties one ground floor one first floor with independent entrances and often garages driveway and garden - at least mine was. The freehold is shared between both dwellings and both have leases linked to the freehold to share cost of maintenance etc. its very common and no issues with getting a mortgage.

Yep, that's just a normal leasehold/share of freehold. But not a 'full freehold flat/maisonette' as you mentioned earlier. That was what I was questioning.