Buying a leasehold house

bluebetty

eddddy wrote: »

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.

We're talking about several hundred years lease with a less than £20 ground rent.

These are older houses.
I can see now that theres a big difference between what could happen in this case in comparison with new builds.

bluebetty

Richard_Webster wrote: »

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.

Thank you, that is really interesting.
So possibly as oppose to instantly ignore leasehold properties its probably worth doing a bit more research about individual properties and who the freeholder is.

User232002

My mother’s property has over 800 years remaining and a ground rent of £6. Hasn’t heard much from the freeholder for the last 30 years. How can this be an issue at all?

Well, a company bought the freehold 3 years ago and now ask her to change insurer every year so they can reap a commission. Yes, there are ways around this, but it’s not easy. And if you mess up, there’s a £60 admin fee for their ‘consent.’

My advice is not to touch leasehold with a barge pole. Reduce your offer by the amount required to buy out the freeholder and if you’ve got the time, get the seller to do that process before buying!

davidmcn

bluebetty wrote: »

Thank you, that is really interesting.
So possibly as oppose to instantly ignore leasehold properties its probably worth doing a bit more research about individual properties and who the freeholder is.

And bear in mind that many freehold properties come with service charges attached, covenants restricting what you can do with them, etc.

jimmyjammy001

New build leasehold houses are the biggest con going, may be cheap ground rent to begin with but it can go up drastically over the years, Leasehold has been around for many years and if you have brought a house with one and are now complaining about it and want the Government to step in then all I can say is tough, unfortunately people have failed to do their research between leasehold and freehold whilst buying a house and they need to take some personal responsibility, instead of blaming their financial choice on everyone else.

User232002

jimmyjammy001 wrote: »

New build leasehold houses are the biggest con going, may be cheap ground rent to begin with but it can go up drastically over the years, Leasehold has been around for many years and if you have brought a house with one and are now complaining about it and want the Government to step in then all I can say is tough, unfortunately people have failed to do their research between leasehold and freehold whilst buying a house and they need to take some personal responsibility, instead of blaming their financial choice on everyone else.

Err... No.

Let’s remember that the internet in its modern form with google and such and abundance of information has only been around for the last 20 years (and 20 is a stretch as it was not as populated back then). How were people meant to know of this when buying a house more than 20 years ago? A solicitor? Oh, but the solicitor that did the house purchase incompetently is now long gone so what recourse do they have? There are plenty of people who had no way of knowing of the clauses that were hidden in their purchase. There are consumer rights laws to protect retailers hiding under Ts&Cs so a substantially bigger purchase like a house should be even more well protected. This doesn’t even take in to account stories like mine where a freeholders behaviour can drastically alter through no fault of the leaseholder.

Let’s be absolutely clear; some of the clauses in leasehold have little genuine purpose other than to force or coerce subsequent owners to abandon the property and cause that land to revert back to the freeholder, enriching them. What Wonga did wasn’t illegal and their customers knew of the stories more or less from the start - and look what happened to them! The government should do something.

davemorton

davidmcn wrote: »

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 wrote: »

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 only more people listened to the voice of reason, and didnt instantly see leasehold and just go :eek::eek::eek: without realising the differences between different leases.

As for the new practice of leases that double etc, if people opened their eyes to them, and stopped buying the houses with them, the builders would quickly have to change their ways.