Pros and cons of buying a leasehold (flat)

lookstraightahead

So, our choices are to buy a beautiful penthouse flat (3rd floor) with far reaching countryside views, and a courtyard garden, bespoke handmade built in furniture, large rooms with hallways etc, in the best location in the area. Only 4 flats altogether (one on each floor) But obviously leasehold. Property is also Victorian.

Or ....

3 or 4 bed semi or detached in great condition but on estate in not quite such a nice area (but perfectly acceptable). Floor space about the same as flat. Freehold.

Or

End of terrace cottage with loads of potential - nothing structurally needed but updates required.

The first two are available the third is an idea. I'm swaying towards the flat but I know there are downsides with flats.

Opinions welcomed. EDIT - it's quarter share of the freehold

da_rule

Personally I would never buy leasehold. The potential cost risks are too high. The week after you move in, the building could need a new roof and you could be lumbered with a bill for thousands of pounds in service charge.

Also, leases are a wasting asset. You therefore either have to pay to renew the lease or eventually possession of the flat passes back to the freeholder.

I would take the freehold option every time.

lookstraightahead

It could be that each leaseholder owns a share of the freehold ... how would I find that out?

eddddy

da_rule wrote: »

The week after you move in, the building could need a new roof and you could be lumbered with a bill for thousands of pounds in service charge.

I'm not sure that's a good argument.

You could equally say that you buy a freehold house and find it needs a new roof and be lumbered with a bill for thousands of pounds.

The way to protect yourself is by getting surveys.

Also

• A good management co will tell you about their maintenance plans before you purchase (unlike a the owner of a house).

• The management co will arrange for the work to be done and deal with the contractors (so you don't have to google for 'Roofers' and potentially stumble across 'cowboys').

But

• You will have no control over when the work is done, or the choice of contractor

• If you were in control, you might have found a cheaper contractor or cheaper solution.

• You have to pay the management co a fee for doing this

• Some management cos are rubbish (but some are good)

So if you do decide to buy a leasehold, checking up on the 'quality' of the management co should probably be a priority.

bouicca21

As far as the flat is concerned, forget the garden. You won’t use it because it will be too much of a faff from the 3rd floor. More serious issues are the length of the lease, the state of repair (Victorian May = high maintenance) and the ground rent. But then, freehold houses also need maintenance ...

Who owns the freehold on the flat building?

For all the options consider location. Local shops, pubs restaurants etc. Transport options, parking. How does your lifestyle fit with what is on offer.

kazwookie

I would go with 3.

End of terrace cottage with loads of potential - nothing structurally needed but updates required.

Then you can adapt it to suit your needs.

Is it freehold?

PasturesNew

I am looking for a new home. I started looking at flats because what I really wanted was a little bungalow, but they weren't available/were in the wrong (remote) spots. So I figured some flats can provide the same functionality.

I have always been a "Council tax band C" type of person, wealth-wise. You have your home, you pay your council tax, the world goes away.

I looked at one flat (bit grubby/shabby as it turned out) - that was Band E council tax and a service charge of about £1800/year, plus a ground rent of about £200. So I dismissed it mostly on grubbiness/shabbiness, but it niggled me that every year, to make the world go away, I'd have to pay £2000 council tax AND £2000 service charge/ground rent. C band, to make the world go away in freehold, costs about £1500. So I'd be handing over £4k/year instead of £1500. I could do a LOT with that difference of £2500/year, even thinking "£500 maintenance for the pot" I'd still have £2k to not have to guarantee coming in.

It's that sword of damocles over you really - that you can't just pay off the Council to leave you alone... you also have to pay somebody else to continue living in your home.

bouicca21

lookstraightahead wrote: »

It could be that each leaseholder owns a share of the freehold ... how would I find that out?

Ask.

Usually it would be advertised as such.

lookstraightahead

Ah ok it's quarter share of the freehold

AnotherJoe

I concur with bouicca, if a garden is important then a courtyard garden from the third floor will be a faff especially if it's shared (or would it be for exclusive use? Does each flat get one? )
But if it's not important that flat sounds better to me.

lookstraightahead

Each flat has a garden so it's for exclusive use. Ground floor is flat 2 so it's kind of two floors up I suppose, but yes not ideal for carrying up your barbecue. Each flat is over the entire floor