Leasehold Flats

Conan1Sett

Let's say, for instance, I have a mortgage on a leasehold for a flat. 

What happens when I re-mortgage? Do I need to wait for someone to purchase the lease before I can "sell" or can the landlord just move a tenant in there on a short-term basis? Basically what people usually refer to us as "renting." 

I'd hate to be stuck somewhere without being able to move on.  

user1977

I think you're confused about terminology, but I'm not sure in what way.

Remortgaging is when you change your mortgage provider. It doesn't mean a change in who is occupying the property, and (generally speaking) it doesn't make a difference to the overall process whether it's a leasehold or freehold property.

Selling is when you stop being the owner, because somebody has bought the property from you. What they're buying from you, when it's a leasehold property, is the right to continue being the "tenant" (or "leaseholder") for the remainder of the duration of the lease.

As with any property, you could be "stuck" until you find a buyer.

Conan1Sett

user1977 said:

I think you're confused about terminology, but I'm not sure in what way.

Remortgaging is when you change your mortgage provider. It doesn't mean a change in who is occupying the property, and (generally speaking) it doesn't make a difference to the overall process whether it's a leasehold or freehold property.

Selling is when you stop being the owner, because somebody has bought the property from you. What they're buying from you, when it's a leasehold property, is the right to continue being the "tenant" (or "leaseholder") for the remainder of the duration of the lease.

As with any property, you could be "stuck" until you find a buyer.

But with it being a leasehold I won't own any equity? 

Also, surely the value of the leasehold decreases to pretty much NIL and once I've paid for the lease it immediately goes back to the landlord and I lose the price I paid to the landlord as if I was a short-term rentee? 

user1977

Conan1Sett said:

user1977 said:

I think you're confused about terminology, but I'm not sure in what way.

Remortgaging is when you change your mortgage provider. It doesn't mean a change in who is occupying the property, and (generally speaking) it doesn't make a difference to the overall process whether it's a leasehold or freehold property.

Selling is when you stop being the owner, because somebody has bought the property from you. What they're buying from you, when it's a leasehold property, is the right to continue being the "tenant" (or "leaseholder") for the remainder of the duration of the lease.

As with any property, you could be "stuck" until you find a buyer.

But with it being a leasehold I won't own any equity? 

Also, surely the value of the leasehold decreases to pretty much NIL and once I've paid for the lease it immediately goes back to the landlord and I lose the price I paid to the landlord as if I was a short-term rentee? 

You have the equity in the leasehold interest. The leasehold only decreases to nil value at the end, you'll be buying something with (probably) over 100 years still to go. You don't pay the price to the landlord (unless it's a newbuild), you pay the price to whoever the current leaseholder is.

Conan1Sett

user1977 said:

Conan1Sett said:

user1977 said:

I think you're confused about terminology, but I'm not sure in what way.

Remortgaging is when you change your mortgage provider. It doesn't mean a change in who is occupying the property, and (generally speaking) it doesn't make a difference to the overall process whether it's a leasehold or freehold property.

Selling is when you stop being the owner, because somebody has bought the property from you. What they're buying from you, when it's a leasehold property, is the right to continue being the "tenant" (or "leaseholder") for the remainder of the duration of the lease.

As with any property, you could be "stuck" until you find a buyer.

But with it being a leasehold I won't own any equity? 

Also, surely the value of the leasehold decreases to pretty much NIL and once I've paid for the lease it immediately goes back to the landlord and I lose the price I paid to the landlord as if I was a short-term rentee? 

You have the equity in the leasehold interest. The leasehold only decreases to nil value at the end, you'll be buying something with (probably) over 100 years still to go. You don't pay the price to the landlord (unless it's a newbuild), you pay the price to whoever the current leaseholder is.

But if I wanted to sell my leasehold interest because I wanted to move home surely I should be willing to accept a lower price during negotiation? 

user1977

Conan1Sett said:

user1977 said:

Conan1Sett said:

user1977 said:

I think you're confused about terminology, but I'm not sure in what way.

Remortgaging is when you change your mortgage provider. It doesn't mean a change in who is occupying the property, and (generally speaking) it doesn't make a difference to the overall process whether it's a leasehold or freehold property.

Selling is when you stop being the owner, because somebody has bought the property from you. What they're buying from you, when it's a leasehold property, is the right to continue being the "tenant" (or "leaseholder") for the remainder of the duration of the lease.

As with any property, you could be "stuck" until you find a buyer.

But with it being a leasehold I won't own any equity? 

Also, surely the value of the leasehold decreases to pretty much NIL and once I've paid for the lease it immediately goes back to the landlord and I lose the price I paid to the landlord as if I was a short-term rentee? 

You have the equity in the leasehold interest. The leasehold only decreases to nil value at the end, you'll be buying something with (probably) over 100 years still to go. You don't pay the price to the landlord (unless it's a newbuild), you pay the price to whoever the current leaseholder is.

But if I wanted to sell my leasehold interest because I wanted to move home surely I should be willing to accept a lower price during negotiation? 

I didn't suggest you couldn't. Mostly this is all the same as freehold properties, the fundamentals aren't all that much different.

Conan1Sett

user1977 said:

Conan1Sett said:

user1977 said:

Conan1Sett said:

user1977 said:

I think you're confused about terminology, but I'm not sure in what way.

Remortgaging is when you change your mortgage provider. It doesn't mean a change in who is occupying the property, and (generally speaking) it doesn't make a difference to the overall process whether it's a leasehold or freehold property.

Selling is when you stop being the owner, because somebody has bought the property from you. What they're buying from you, when it's a leasehold property, is the right to continue being the "tenant" (or "leaseholder") for the remainder of the duration of the lease.

As with any property, you could be "stuck" until you find a buyer.

But with it being a leasehold I won't own any equity? 

Also, surely the value of the leasehold decreases to pretty much NIL and once I've paid for the lease it immediately goes back to the landlord and I lose the price I paid to the landlord as if I was a short-term rentee? 

You have the equity in the leasehold interest. The leasehold only decreases to nil value at the end, you'll be buying something with (probably) over 100 years still to go. You don't pay the price to the landlord (unless it's a newbuild), you pay the price to whoever the current leaseholder is.

But if I wanted to sell my leasehold interest because I wanted to move home surely I should be willing to accept a lower price during negotiation? 

I didn't suggest you couldn't. Mostly this is all the same as freehold properties, the fundamentals aren't all that much different.

Well what if you were to have children and they can't inherit the leasehold? 

Unless they can inherit leaseholds? 

user1977

Conan1Sett said:

user1977 said:

Conan1Sett said:

user1977 said:

Conan1Sett said:

user1977 said:

I think you're confused about terminology, but I'm not sure in what way.

Remortgaging is when you change your mortgage provider. It doesn't mean a change in who is occupying the property, and (generally speaking) it doesn't make a difference to the overall process whether it's a leasehold or freehold property.

Selling is when you stop being the owner, because somebody has bought the property from you. What they're buying from you, when it's a leasehold property, is the right to continue being the "tenant" (or "leaseholder") for the remainder of the duration of the lease.

As with any property, you could be "stuck" until you find a buyer.

But with it being a leasehold I won't own any equity? 

Also, surely the value of the leasehold decreases to pretty much NIL and once I've paid for the lease it immediately goes back to the landlord and I lose the price I paid to the landlord as if I was a short-term rentee? 

You have the equity in the leasehold interest. The leasehold only decreases to nil value at the end, you'll be buying something with (probably) over 100 years still to go. You don't pay the price to the landlord (unless it's a newbuild), you pay the price to whoever the current leaseholder is.

But if I wanted to sell my leasehold interest because I wanted to move home surely I should be willing to accept a lower price during negotiation? 

I didn't suggest you couldn't. Mostly this is all the same as freehold properties, the fundamentals aren't all that much different.

Well what if you were to have children and they can't inherit the leasehold? 

Unless they can inherit leaseholds? 

They can inherit anything. It would work in exactly the same way as inheriting a freehold property.

SallyDucati

OP this may be a bit of a left field thought - have you been looking at American websites?  I know they basically call what we call renting, 'leasing'.  When you own a leasehold it is generally for at least 80 years +, and when you need to extend (which you should do before reaching 80 years) there is a statutory right to do so, the freeholder can't say no but you do have to pay them based on the value of the leasehold.

You can pass a leasehold onto whoever you want to in a will, or sell to whoever you want to.

Conan1Sett

SallyDucati said:

OP this may be a bit of a left field thought - have you been looking at American websites?  I know they basically call what we call renting, 'leasing'.  When you own a leasehold it is generally for at least 80 years +, and when you need to extend (which you should do before reaching 80 years) there is a statutory right to do so, the freeholder can't say no but you do have to pay them based on the value of the leasehold.

You can pass a leasehold onto whoever you want to in a will, or sell to whoever you want to.

Ok so let's say the leasehold is paid for during X year. I own the leasehold until I pass away, then my children inherit the leasehold with it's X amount of years remaining. 

Do they need to purchase the leasehold again themselves or do they get an extension for free or a reduced price or does the right of tenancy revert to the landlord? 

SallyDucati

The key here is you shouldn't let your lease run down.   Extend it before it gets to 80 years or the value does fall, the statutory that the freeholder must extend by is 90 years so that would take it to 170 minimum.  The cost to extend is not a simple calculation based on original amount/number of years.

I suggest you read this from the government funded advice service - https://www.lease-advice.org/advice-guide/living-leasehold-flats-guide/