Buying Leasehold or Share of Freehold Flat???

Veeo

Hi all, 
I am looking at buying a flat in London and I don't know if a flat with shared freehold is better than a Leasehold flat? I can't afford to buy a house at the moment so I am a bit restricted.

I am worried about maintenance cost and other unforeseen cost associated with having a flat.

Please could anyone share some pros and cons of having a Leasehold or a share of a freehold flat?

Thank you in advance xxx

NameUnavailable

All (nearly all) flats are leasehold.

The freehold will be owned by another party, or might be owned by some or all of the leaseholders (shared freehold).

Generally having a share of the freehold should be better as you have a say in how the place is managed. The downsides are that you may have to be involved in getting works done or taking action against neighbours who don't co-operate when maintenance is required.

The things to look into are the arrangements it place and the recent history of works done/general state of the place etc.

NameUnavailable

Just to add, read some of the threads on here about EWS1 forms / cladding and upcoming fire regulations for block of flats, and the issues regarding ground rent and AST. Lots to consider at the moment if buying a flat!!

coachman12

Veeo said:

Hi all, 
I am looking at buying a flat in London and I don't know if a flat with shared freehold is better than a Leasehold flat? I can't afford to buy a house at the moment so I am a bit restricted.

I am worried about maintenance cost and other unforeseen cost associated with having a flat.

Please could anyone share some pros and cons of having a Leasehold or a share of a freehold flat?

Thank you in advance xxx

I've never been aware of a flat in London that was anything but leasehold----the only thing that has ever bothered me is if it's got a long lease. I have never considered freehold flat in London, though my first ever home purchase was a flat in Putney and my second in a flat in Blackheath. And I still own a flat now in London which is leasehold, though not used too much nowadays. So, I'm sorry not to be able to offer personal info about what you are trying to find out about as freehold is not really in my realm in London and I don't recommend that you should give it too much consideration either. You'll know management costs in advance , and maintenance costs don't really arise as insurance takes care of damages and improvements are up to the owner as with all properties.
Best of luck, Veeo.

watermelonspring

I’m very confused by these answers.
There are A LOT of flats in London that are share of freehold and they are extremely easy to find. Look at flats that are part of Victorian townhouse conversions, not new build flats. 

hazyjo

watermelonspring said:

I’m very confused by these answers.
There are A LOT of flats in London that are share of freehold and they are extremely easy to find. Look at flats that are part of Victorian townhouse conversions, not new build flats. 

I think some were confused about what was being asked and missed the "share of" bit.

Share of freehold can be newer properties too and blocks, although unlikely to be brand new builds. More conversions are likely to be SoF, but certainly not exclusively older/converted ones.

princeofpounds

Generally, 'share of freehold + leasehold title' (to give it a more full name and avoid confusion) is better than leasehold. The interests of the leaseholders and the freeholders are more aligned, as they are the same people (although acting collectively through a company in the case of the freehold). 

However, never ever regard it as a panacea. A great example of how it can go wrong is in the current thread linked below. You can still be exposed to amateur management, people unwilling to spend any money even when necessary, absentee owners, incompetent managing agents and outright cranks. 

https://forums.moneysavingexpert.com/discussion/comment/77696720#Comment_77696720

In my experience, the dangers tend to be largest when the block of flats is either very small (particularly 2 people where one is troublesome - can't be easily overruled by sensible people and it gets very personal), or very large (difficult to co-ordinate and communicate between leaseholders)

You need to do what you can to find out how the block is managed in practice. Observe the condition of the block. Speak to neighbours. Review the freehold company accounts. etc.

steve866

I was looking for a property in SW London previously and could only afford a flat at the time. I limited my search to share of freehold properties with private garden, a lot of them do exist. 

I ended up staying put for another couple of years and moving to a house, but I would happily have done the above if I found the right property. 

bouicca21

Share of freehold is fine if all the owners cooperate and are reasonable. It’s a nightmare if there is even just one awkward g!t.  It’s also a fair bit of work depending on how much maintenance needs to be organised.

there is also a half way house - where the lease owners have taken on right to manage.

The more important Issues about leasehold flats are about the lease itself.  How long is it (it will need to be renewed if anywhere near 80 years). What is the ground rent and does it have any kind of onerous escalation (Becomes an AST In London once the ground rent goes over £1,000).  What is the service charge  likely to be and are there any major works in the offing?  Are pets allowed?  Is there a garden and if so who can use it?  Is there dedicated parking?

ideally you want the answers to these questions before you spend any money on conveyancing.  Ask to see a copy of the lease or download it from the land registry.  

Veeo

Thank you all so so much, your comments have been very helpful.