Leasehold houses purchase

Cpu2007

I'm currently in the pursuit of purchasing a house and have noticed a considerable number of houses being marked as leasehold.

I did my research and have always been opposed to leasehold properties but this was limited to flats as my understanding is that this will stop me from doing any work to the property, having to pay ground rent and some sort of maintenance fees as well.

However, does the same apply to house (detached, semi-detached)
Every single time I ask, either the agency or the homeowner tell me that I have to pay a small ground rent fee per year, these properties have over 700 years of lease.
I also noticed the did extensions to the house as well.

so what exactly are the disadvantages of buying a house on leasehold ?

Thank you

princeofpounds

You probably have a number of misconceptions about how leasehold title works. That's not uncommon.

First - your best general resource (besides your solicitor of course) for all matters leasehold is LAS. You can even speak to them on the phone for free if you like.

https://www.lease-advice.org/

Issues like consent for alterations (and indeed all other sorts of covenants), ground rent and service charges are totally dependent on the terms of the lease. You can usually order a copy of the lease from the land registry if one is on file (form OC2 IIRC) so you can check all of that before even making an offer, if you like.

Generally speaking, leasehold titles for standalone houses are much more liberal than for flats, which makes sense - you need more rules and powers to collectively manage a structure. However, it's always on a case-by-case basis, there is no rule.

If you have a leasehold house with a very long lease, no restrictions on the structure, zero or peppercorn ground rent, and where all the maintenance and insurance etc. is the responsibility of the leaseholder... it is for all practical purposes almost indistinguishable from a freehold property. You could do anything a freehold property owner could do, the one difference being that your legal title is time-limited (but if it's 700 years, who cares...).

It is quite common for historic reasons to find leasehold houses that have a ground rent - often rather minimal - but where the existence of the freeholder is otherwise not relevant. It's something that is particularly common in certain areas of the country. If that's the case, the financial liability you have is precisely defined and it shouldn't be an obstacle as long as you are comfortable with it.

What makes excluding leasehold houses particularly silly is that in most cases, you would be eligible for force the purchase of the freehold after 2 years (or before if the vendor starts the process for you). With a very long lease and minimal ground rent, the cost of the freehold may be less than your legal fees. Check with your solicitor and/or LAS if the property would be eligible before you get too far into the process - At a guess over 95% of houses would be.

user1977

Also bear in mind that, conversely, freehold houses can come with a long list of title restrictions and liabilities to pay common charges etc. Not much point making assumptions based on the type of tenure.

princeofpounds

user1977 said:

Also bear in mind that, conversely, freehold houses can come with a long list of title restrictions and liabilities to pay common charges etc. Not much point making assumptions based on the type of tenure.

Very good point.

newsgroupmonkey_

princeofpounds said:

You probably have a number of misconceptions about how leasehold title works. That's not uncommon.

First - your best general resource (besides your solicitor of course) for all matters leasehold is LAS. You can even speak to them on the phone for free if you like.

https://www.lease-advice.org/

Issues like consent for alterations (and indeed all other sorts of covenants), ground rent and service charges are totally dependent on the terms of the lease. You can usually order a copy of the lease from the land registry if one is on file (form OC2 IIRC) so you can check all of that before even making an offer, if you like.

Generally speaking, leasehold titles for standalone houses are much more liberal than for flats, which makes sense - you need more rules and powers to collectively manage a structure. However, it's always on a case-by-case basis, there is no rule.

If you have a leasehold house with a very long lease, no restrictions on the structure, zero or peppercorn ground rent, and where all the maintenance and insurance etc. is the responsibility of the leaseholder... it is for all practical purposes almost indistinguishable from a freehold property. You could do anything a freehold property owner could do, the one difference being that your legal title is time-limited (but if it's 700 years, who cares...).

It is quite common for historic reasons to find leasehold houses that have a ground rent - often rather minimal - but where the existence of the freeholder is otherwise not relevant. It's something that is particularly common in certain areas of the country. If that's the case, the financial liability you have is precisely defined and it shouldn't be an obstacle as long as you are comfortable with it.

What makes excluding leasehold houses particularly silly is that in most cases, you would be eligible for force the purchase of the freehold after 2 years (or before if the vendor starts the process for you). With a very long lease and minimal ground rent, the cost of the freehold may be less than your legal fees. Check with your solicitor and/or LAS if the property would be eligible before you get too far into the process - At a guess over 95% of houses would be.

Let's not forget, however, that many modern (ish) houses are leasehold because it means that the developer can ensure that the chocolate box houses stay looking like chocolate box houses and therefore increase the value of the new houses that the developer then builds.

They can have things in to say that you can't put any structure (wooden or otherwise) on the land, or park certain things or change the colour of the house and so on.

princeofpounds

newsgroupmonkey_ said:

princeofpounds said:

You probably have a number of misconceptions about how leasehold title works. That's not uncommon.

First - your best general resource (besides your solicitor of course) for all matters leasehold is LAS. You can even speak to them on the phone for free if you like.

https://www.lease-advice.org/

Issues like consent for alterations (and indeed all other sorts of covenants), ground rent and service charges are totally dependent on the terms of the lease. You can usually order a copy of the lease from the land registry if one is on file (form OC2 IIRC) so you can check all of that before even making an offer, if you like.

Generally speaking, leasehold titles for standalone houses are much more liberal than for flats, which makes sense - you need more rules and powers to collectively manage a structure. However, it's always on a case-by-case basis, there is no rule.

If you have a leasehold house with a very long lease, no restrictions on the structure, zero or peppercorn ground rent, and where all the maintenance and insurance etc. is the responsibility of the leaseholder... it is for all practical purposes almost indistinguishable from a freehold property. You could do anything a freehold property owner could do, the one difference being that your legal title is time-limited (but if it's 700 years, who cares...).

It is quite common for historic reasons to find leasehold houses that have a ground rent - often rather minimal - but where the existence of the freeholder is otherwise not relevant. It's something that is particularly common in certain areas of the country. If that's the case, the financial liability you have is precisely defined and it shouldn't be an obstacle as long as you are comfortable with it.

What makes excluding leasehold houses particularly silly is that in most cases, you would be eligible for force the purchase of the freehold after 2 years (or before if the vendor starts the process for you). With a very long lease and minimal ground rent, the cost of the freehold may be less than your legal fees. Check with your solicitor and/or LAS if the property would be eligible before you get too far into the process - At a guess over 95% of houses would be.

Let's not forget, however, that many modern (ish) houses are leasehold because it means that the developer can ensure that the chocolate box houses stay looking like chocolate box houses and therefore increase the value of the new houses that the developer then builds.

They can have things in to say that you can't put any structure (wooden or otherwise) on the land, or park certain things or change the colour of the house and so on.

Yes, that's true. As I said, it all depends on the details of the lease at hand and it's true to say that more recent houses often have more onerous leases. 

However, I suspect that the houses the OP has been looking at are mostly old houses with historic-style leasehold titles. That's for a few reasons - the very long lease, the very low ground rent and the apparent lack of things like a service charge. But that's an assumption, so I think your clarification is useful.

Slithery

newsgroupmonkey_ said:

princeofpounds said:

You probably have a number of misconceptions about how leasehold title works. That's not uncommon.

First - your best general resource (besides your solicitor of course) for all matters leasehold is LAS. You can even speak to them on the phone for free if you like.

https://www.lease-advice.org/

Issues like consent for alterations (and indeed all other sorts of covenants), ground rent and service charges are totally dependent on the terms of the lease. You can usually order a copy of the lease from the land registry if one is on file (form OC2 IIRC) so you can check all of that before even making an offer, if you like.

Generally speaking, leasehold titles for standalone houses are much more liberal than for flats, which makes sense - you need more rules and powers to collectively manage a structure. However, it's always on a case-by-case basis, there is no rule.

If you have a leasehold house with a very long lease, no restrictions on the structure, zero or peppercorn ground rent, and where all the maintenance and insurance etc. is the responsibility of the leaseholder... it is for all practical purposes almost indistinguishable from a freehold property. You could do anything a freehold property owner could do, the one difference being that your legal title is time-limited (but if it's 700 years, who cares...).

It is quite common for historic reasons to find leasehold houses that have a ground rent - often rather minimal - but where the existence of the freeholder is otherwise not relevant. It's something that is particularly common in certain areas of the country. If that's the case, the financial liability you have is precisely defined and it shouldn't be an obstacle as long as you are comfortable with it.

What makes excluding leasehold houses particularly silly is that in most cases, you would be eligible for force the purchase of the freehold after 2 years (or before if the vendor starts the process for you). With a very long lease and minimal ground rent, the cost of the freehold may be less than your legal fees. Check with your solicitor and/or LAS if the property would be eligible before you get too far into the process - At a guess over 95% of houses would be.

Let's not forget, however, that many modern (ish) houses are leasehold because it means that the developer can ensure that the chocolate box houses stay looking like chocolate box houses and therefore increase the value of the new houses that the developer then builds.

They can have things in to say that you can't put any structure (wooden or otherwise) on the land, or park certain things or change the colour of the house and so on.

These things can all be covered by restrictive covenants on the property. Freehold properties can have exactly the same restrictions.

user1977

Slithery said:

newsgroupmonkey_ said:

princeofpounds said:

You probably have a number of misconceptions about how leasehold title works. That's not uncommon.

First - your best general resource (besides your solicitor of course) for all matters leasehold is LAS. You can even speak to them on the phone for free if you like.

https://www.lease-advice.org/

Issues like consent for alterations (and indeed all other sorts of covenants), ground rent and service charges are totally dependent on the terms of the lease. You can usually order a copy of the lease from the land registry if one is on file (form OC2 IIRC) so you can check all of that before even making an offer, if you like.

Generally speaking, leasehold titles for standalone houses are much more liberal than for flats, which makes sense - you need more rules and powers to collectively manage a structure. However, it's always on a case-by-case basis, there is no rule.

If you have a leasehold house with a very long lease, no restrictions on the structure, zero or peppercorn ground rent, and where all the maintenance and insurance etc. is the responsibility of the leaseholder... it is for all practical purposes almost indistinguishable from a freehold property. You could do anything a freehold property owner could do, the one difference being that your legal title is time-limited (but if it's 700 years, who cares...).

It is quite common for historic reasons to find leasehold houses that have a ground rent - often rather minimal - but where the existence of the freeholder is otherwise not relevant. It's something that is particularly common in certain areas of the country. If that's the case, the financial liability you have is precisely defined and it shouldn't be an obstacle as long as you are comfortable with it.

What makes excluding leasehold houses particularly silly is that in most cases, you would be eligible for force the purchase of the freehold after 2 years (or before if the vendor starts the process for you). With a very long lease and minimal ground rent, the cost of the freehold may be less than your legal fees. Check with your solicitor and/or LAS if the property would be eligible before you get too far into the process - At a guess over 95% of houses would be.

Let's not forget, however, that many modern (ish) houses are leasehold because it means that the developer can ensure that the chocolate box houses stay looking like chocolate box houses and therefore increase the value of the new houses that the developer then builds.

They can have things in to say that you can't put any structure (wooden or otherwise) on the land, or park certain things or change the colour of the house and so on.

These things can all be covered by restrictive covenants on the property. Freehold properties can have exactly the same restrictions.

Indeed. The point of modern leaseholds is that the (not-insignificant) ground rents make the freehold investment an extra thing for the developers to flog when they've sold all the houses.