House we are buying as Free Hold turns out to be Leasehold

D.L

I think my sofa prints more money than that a year...

AdrianC

thyfartismurder said:

AdrianC said:

So - what are your options?
Of course you can ask them to drop the price. And, of course, they may refuse.
If they do, of course you can choose to continue with the purchase or you can choose to walk away.
No, you cannot force them to reduce the price.

I am aware I cannot force them to lower the price, my suggestion was to renegotiate or drop out,

You would really walk away over this...?

Why? Please don't just say "Because I don't like leasehold". Explain to me why. Explain to me exactly why you'd be willing to walk away from this house over something that is functionally identical, bar a couple of quid a year, and which you can resolve for a low cost in a couple of years time. How much would walking away cost you in wasted fees, even before considering the time to find another place you like as much?

Darkslider

AdrianC said:

thyfartismurder said:

AdrianC said:

So - what are your options?
Of course you can ask them to drop the price. And, of course, they may refuse.
If they do, of course you can choose to continue with the purchase or you can choose to walk away.
No, you cannot force them to reduce the price.

I am aware I cannot force them to lower the price, my suggestion was to renegotiate or drop out,

You would really walk away over this...?

Why? Please don't just say "Because I don't like leasehold". Explain to me why. Explain to me exactly why you'd be willing to walk away from this house over something that is functionally identical, bar a couple of quid a year, and which you can resolve for a low cost in a couple of years time. How much would walking away cost you in wasted fees, even before considering the time to find another place you like as much?

Because not physically owning the land your house stands on is a huge psychological barrier for many, and it doesn't matter how many people bleat on that a long lease is the same as a freehold, it just isn't. You might not see it as an issue, but enough people do to considerably reduce your pool of buyers come resale time, which will have an effect on your sale price. Being told you might be able to purchase the freehold in a few years wouldn't be enough for me, I'd either want to purchase it with the house initially or not at all.

rachel230

Also you need to check very carefully about any service and/or estate charges if it's leasehold.

[Deleted User]

In the great words of Will from the Inbetweeners 
Its not really a leasehold at 999 years and £3 ground rent ....  
“ It sort of is though” !

Norman_Castle

thyfartismurder said:

my personal opinion is that we should find out how much it would cost to buy the freehold, then request that the sellers cover this cost / or reduce the price accordingly. but i will speak to my solicitor about this.

Do as above or ask estate agents how much difference it makes to the price. They may not reduce the price but you will know how much it will cost and if the valuation is realistic. Suggest they split the difference.

If it costs £1000 how much is that as a percentage of the price and will you get that back when selling?

AdrianC

Darkslider said:

Because not physically owning the land your house stands on is a huge psychological barrier for many

Lots of totally irrational things are "psychological barriers" for some. Ridiculous, isn't it, how people insist on cutting their own noses off to spite their face?

I know there's the old trope about the "first 1,000yo person being alive now", but do you really think it's going to be you? Or the only putative buyer when you come to sell the house within the next two years?

...and it doesn't matter how many people bleat on that a long lease is the same as a freehold, it just isn't.

I said "functionally identical" deliberately.

You might not see it as an issue, but enough people do to considerably reduce your pool of buyers come resale time, which will have an effect on your sale price.

So what's changing between now and <2yrs time? Because it doesn't make any effect on price now, and never has historically. Once it reaches 2yrs time, then you don't need to consider selling as long lease. Because if it's an issue to you, you have the legal right to buy the freehold for the price of a month or two's mortgage interest.

Being told you might be able to purchase the freehold in a few years wouldn't be enough for me, I'd either want to purchase it with the house initially or not at all.

And we're back to irrationality in the face of practical reality.

jimbog

If you do go ahead make sure you pay the £3 promptly or you might be wacked for admin fees

ciderboy2009

jimbog said:

If you do go ahead make sure you pay the £3 promptly or you might be wacked for admin fees

Really?  In my experience these old peppercorn rent leases rarely have any clauses allowing for fees such as that.

davemorton

This is the problem, people hear about all the scare stories about leasehold, and believe all leases are equal.  Where I live I would say the majority of homes are leasehold, but again, a few pound a year, and 999 year leases.  Not all leases are equal, and they are not always something to be scared of.