Buying a leasehold house

bluebetty

A lot of the houses where I am looking to buy are leasehold.
They all seem to be on a long lease with a tiny ground rent.

I've looked into what it would take (should I buy a leasehold house) to buy the leasehold and you've got to have lived in the property for two years, plus the cost varies depending on the ground rent and length left on lease.

Is it best to steer away and just buy a house that is freehold?
Or do people just ignore the fact its leasehold?

[Deleted User]

Do your research and walk away having joined the FB group National Leasehold Campaign and realise what a lucky escape you had.

eddddy

bluebetty wrote: »

I've looked into what it would take (should I buy a leasehold house) to buy the [STRIKE]leasehold[/STRIKE] freehold and you've got to have lived in the property for two years, plus the cost varies depending on the ground rent and length left on lease.

If it's something like a 900 year lease with a £5 ground rent, most people probably aren't too bothered.

The cost of buying the freehold will probably only be a hundred or two - but the legal fees might be £1k to £2k.

Maybe just factor that into the price you offer, and aim to buy the freehold in a couple of years - or earlier, if the freeholder agrees to a sensible deal.

[Deleted User]

eddddy wrote: »

If it's something like a 900 year lease with a £5 ground rent, most people probably aren't too bothered.

The cost of buying the freehold will probably only be a hundred or two - but the legal fees might be £1k to £2k.

Maybe just factor that into the price you offer, and aim to buy the freehold in a couple of years - or earlier, if the freeholder agrees to a sensible deal.

All very nice unless the Freeholder has sold it to an offshore company without your knowledge

bluebetty

That doesn't fill me with confidence!
I will have a look at the group, thanks

bluebetty

eddddy wrote: »

If it's something like a 900 year lease with a £5 ground rent, most people probably aren't too bothered.

The cost of buying the freehold will probably only be a hundred or two - but the legal fees might be £1k to £2k.

Maybe just factor that into the price you offer, and aim to buy the freehold in a couple of years - or earlier, if the freeholder agrees to a sensible deal.

That was my thought, but something just doesn't sit right with the idea of only being a leasehold, but I'm not sure if i'm just over thinking it as so many people must be leaseholders and buy and sell the houses without an issue

nrsql

Check the rules to see if they can be varied.
The problem with a lot is that the ground rent doubles periodically which makes the house worthless after a period. Your ground rent might be tiny at the moment but check if it is increasing at all (if not check what the freeholder gets out of it) and also whether the terms can be changed.
Also check about other costs - is there maintenance, payment for authorising changes (sale, solar panels, conservatory), are you forced to maintain using their contractors. These can all increase unreasonably.
Also the freehold will probably be sold at some point so the conditions need to be passed on and the cost of purchase may increase after this.

Value will probably be reduced as a lot people will see leasehold and walk away.
Could be that they just want to stop people making undesirable changes on an estate - but that doesn't have to be leasehold, could be a rent charge (company systems sometimes call that leasehold but it isn't) but the other costs would still apply. In that case you would probably be liable for maintenance of communal areas which could come with high admin costs.
Also check whether the road has been adopted - if they say it's going to be don't believe them.

davidmcn

If it's an ultra-long lease with an insignificant rent and no material restrictions in the lease, then that's quasi-ownership. The bad publicity is from more recent developments which have leases with escalating ground rents or other methods of regularly extracting money from leaseholders.

hazyjo

Would be wary on a new estate. If an old established house/road/area, then it's likely to be more common and expected. It's fairly normal in certain areas.


If new, there are likely to be service charges.


If old, probably not. Although check that lease carefully for clauses you're not happy with.

eddddy

bluebetty wrote: »

They all seem to be on a long lease with a tiny ground rent.

How long and what ground rent?

Depending on your answer, I suspect that a number of replies you've had on this thread aren't relevant.

Richard_Webster

In my area there are a lot of long leases of houses dating back to 1860 to say 1910 where the lease is for 999 years and the freeholder has disappeared. Freeholder dies and family see that they can only collect say £3 per year from each house so the admin involved is too much and they don't bother to try to collect and contact is lost.

If you can't find the freeholder it is very expensive and time-consuming (but not impossible) to buy the freehold.

If thinking of buying you can check at the Land Registry to see if the freehold title is registered and find out the owner. Mostly if there's no record and the seller has no details for the freeholder then he has disappeared- but just because title isn't registered doesn't mean the freeholder isn't active - just means he has held it since before compulsory registration applied in the area.

Then once you know name of freeholder you can Google the name of the owner and their address, Address is important as you may find that if it is a company whilst that company is not known generally another company at the same address is quite notorious and a Google Search will throw up bad reviews. These people can be a pain and will look for every opportunity to make money out of you so be careful. Other times you will find that the freeholder is quite friendly and will sell the freehold for a fair price without too much in the way of legal fees.

If the house is newish then there's no good reason why it should be leasehold at all - builder is simply trying to take advantage of gullible buyers who don't realise there will be a further payment down the track to buy the freehold - which will be expensive because of the lease being only for say 125 years and the ground rent doubling frequently.