Dreaded Leasehold - looking for guidance

KatieDee

After a long and somewhat frustrating house hunt, we have now found a property we feel is suitable and would like to submit an offer. Nervous isn't the word!

The property is a semi-detached house, currently on the market for £204,000. Very difficult to price as the street hasn't had many sales recently but it is in great condition, which is clearly the reason behind the price. Unfortunately due to health issues, the couple have to downsize. It is next to a small factory, which operates 8-5 Monday to Friday, but they have a fantastic ongoing relationship with them so this didn't concern us due to the positioning of the house being so central.

Our one concern and the thing stopping me from emailing an offer over today is that the property is a leasehold. The lease has over 950 years left and I have done my homework about what a leasehold means, but I'm still not sure. The area of which we're moving to is absolutely full of leasehold houses and looking on Zoopla, I can see that many properties on the same road are Freehold, so I'm assuming they have purchased this.

It is advertised as a leasehold and I do not feel it is fair to reduce our offer under these grounds, especially given that we don't know whether purchasing the freehold would be possible, or how much this might be. However, I don't feel comfortable offering close to full price, as I see the leasehold as a bit of a negative.

I suppose I'm looking for some guidance here...is it worth purchasing a leasehold house? Is it always easy enough to purchase the freehold? Is there any way to find out the likelihood/cost of purchasing a leasehold before you own the property yourself?

Thanks in advance

eddddy

KatieDee wrote: »

Is it always easy enough to purchase the freehold? Is there any way to find out the likelihood/cost of purchasing a [STRIKE]leasehold[/STRIKE] freehold before you own the property yourself?

Yes - 2 ways... 'the informal route' and 'the formal route'.

In overview:

The informal route is to ask the freeholder what price they want for the freehold - and negotiate.

The formal route is to ask a valuer to value the freehold and serve a statutory notice on the freeholder to buy it. (But you have to ask the current owner to do this, or wait until you've owned the house for 2 years.)

Often the price the freeholder asks via 'the informal route' is much higher the the price via 'the formal route' - but not always.

need_an_answer

The leasehold wouldn't be the thing that frightened me off,it would be the factory.

Simply because the lease element of the house will be well documented over any annual charges and maintenance costs. Being 950 years its a very healthy lease and will not be devalued if you sell within your lifetime...and is probably purchasable.


The factory on the other hand could change hands,be demolished or refurbished into any manner of guises within the time you live there.Whats there today could and probably will be totally different in 15 years time.

Tom99

You need to see the lease. Is it a fixed ground rent for the whole 950yrs, is there a service charge if so what is it for,who insures, what are the tenant's obligations, what is the landlord responsible for if anything, what can/can't the tenant do with the property which could be done if the freehold was owned etc.

Richard_Webster

...and can the freeholder even be contacted? Important to find that out! Sometimes they have disappeared long ago.

SmashedAvacado

There may be a right of enlargement regardless of the enfranchisement position

Key questions -
what is the ground rent? Is it a peppercorn ?
Can the ground rent be upped?
Can the lease be determined by the landlord for breach?