LEASEHOLD - JUST PUT ALL THE FEES ON RIGHTMOVE!!!

HRH_MUngo

My son's lease cost £12k to extend it and he now has about 140 years on it.  It makes a difference of about £30k to the price of the flat.  It would seem an unwise move not to mention the long lease if he was putting it up for sale!

SensibleSarah

My house is leasehold but that information didn't come out until WAY into the purchase process. It was advertised by the EA as freehold but was being sold by the family of deceased owner so presumably they just didn't bother looking into it before listing - none of them had ever lived there apparently. I nearly backed out when this came to light, despite having already spent money I couldn't afford to lose at the time on fees, searches etc, but did a bit of research online and decided to carry on. It's an old style lease at least, still with 950 ish years on the lease, peppercorn rent and the freeholder is the local council. They've recently written to me to offer the freehold but that costs money I don't have currently so not an option, even thought it's 'cheap' by most standards. 

I plan to sell up in a couple of years (as soon as I've been self-employed for long enough to get another mortage) so might buy freehold before then, but it doesn't seem to effect the value or demand in my area so might not bother. If it's still leasehold then I'll make sure the EA lists it with full details of length of lease etc. Not fair to do it any other way IMO. 

IAMIAM

HRH_MUngo said:

My son's lease cost £12k to extend it and he now has about 140 years on it.  It makes a difference of about £30k to the price of the flat.  It would seem an unwise move not to mention the long lease if he was putting it up for sale!

This is interesting, I had heard that extending leases going forward takes the lease up to 999 years as a minimum and a permanent zero ground rent. Or is this in the pipeline. Either way, most people I know seem to be put off buying leasehold flats until the Ground Rent is zero for all and Leasehold length is 999 for all. This basically means, in my eyes, service charges are practically going to DOUBLE??? Is this new build only though??

eddddy

IAMIAM said:

This is interesting, I had heard that extending leases going forward takes the lease up to 999 years as a minimum and a permanent zero ground rent. Or is this in the pipeline. Either way, most people I know seem to be put off buying leasehold flats until the Ground Rent is zero for all and Leasehold length is 999 for all. This basically means, in my eyes, service charges are practically going to DOUBLE??? Is this new build only though??

The plan is that all leases will be extendable to 990 years - with zero ground rent.

But the leaseholder will still have to pay for the lease extension. So, as in the example mentioned above, a lease extension might cost £12k, but increase the flat value by £30k - so in that example, it's 'better value' to buy a flat without an extended lease.


Lease length and ground rent has no impact on service charges - so I'm not sure why you say service charges will "DOUBLE".

IAMIAM

eddddy said:

IAMIAM said:

This is interesting, I had heard that extending leases going forward takes the lease up to 999 years as a minimum and a permanent zero ground rent. Or is this in the pipeline. Either way, most people I know seem to be put off buying leasehold flats until the Ground Rent is zero for all and Leasehold length is 999 for all. This basically means, in my eyes, service charges are practically going to DOUBLE??? Is this new build only though??

The plan is that all leases will be extendable to 990 years - with zero ground rent.

But the leaseholder will still have to pay for the lease extension. So, as in the example mentioned above, a lease extension might cost £12k, but increase the flat value by £30k - so in that example, it's 'better value' to buy a flat without an extended lease.


Lease length and ground rent has no impact on service charges - so I'm not sure why you say service charges will "DOUBLE".

It does. or it will do soon. No builder is going to give a flat owner or land owner a flat, with a 999 year lease and zero ground rent and allow a management company to have an income for life that's peanuts. What will happen, service charge will increase and a premium sent to leaseholder

eddddy

IAMIAM said:

eddddy said:

IAMIAM said:

This is interesting, I had heard that extending leases going forward takes the lease up to 999 years as a minimum and a permanent zero ground rent. Or is this in the pipeline. Either way, most people I know seem to be put off buying leasehold flats until the Ground Rent is zero for all and Leasehold length is 999 for all. This basically means, in my eyes, service charges are practically going to DOUBLE??? Is this new build only though??

The plan is that all leases will be extendable to 990 years - with zero ground rent.

But the leaseholder will still have to pay for the lease extension. So, as in the example mentioned above, a lease extension might cost £12k, but increase the flat value by £30k - so in that example, it's 'better value' to buy a flat without an extended lease.


Lease length and ground rent has no impact on service charges - so I'm not sure why you say service charges will "DOUBLE".

It does. or it will do soon. No builder is going to give a flat owner or land owner a flat, with a 999 year lease and zero ground rent and allow a management company to have an income for life that's peanuts. What will happen, service charge will increase and a premium sent to leaseholder

Lots of misunderstanding there.

• Ground rent goes to the freeholder - not the management company

• The service charge is your share of the bills - like buildings insurance, communal electricity, building repairs, admin costs. None of those are affected by the ground rent

For example, building insurance premiums don't increase as a result of a change in ground rent.

In simple terms, the management company's job is to add up all the bills to get a grand total - and then divide it amongst all the leaseholders. (A bit like when a group of people eat in a restaurant, and then divide the bill between themselves.)

The management company charge a fee for doing that, but it's not related to ground rent.


Maybe start a new thread about what service charges are, if you want to discuss that. 

Tiglet2

NameUnavailable said:

I don't understand how any sensible estate agent can put a value on a property without this information.

^^ This ^^

No wonder so many people are frustrated that they are halfway through the conveyancing before they find out how long the remaining lease is, how much the ground rent is and whether it increases at certain points and what the likely service charges are.  It is unsurprising that people then want to renegotiate their offers when they realise that the EA has vastly over-estimated the asking price, because they failed to take into account vital leasehold information which directly impacts the valuation for the property.

IAMIAM

eddddy said:

IAMIAM said:

eddddy said:

IAMIAM said:

This is interesting, I had heard that extending leases going forward takes the lease up to 999 years as a minimum and a permanent zero ground rent. Or is this in the pipeline. Either way, most people I know seem to be put off buying leasehold flats until the Ground Rent is zero for all and Leasehold length is 999 for all. This basically means, in my eyes, service charges are practically going to DOUBLE??? Is this new build only though??

The plan is that all leases will be extendable to 990 years - with zero ground rent.

But the leaseholder will still have to pay for the lease extension. So, as in the example mentioned above, a lease extension might cost £12k, but increase the flat value by £30k - so in that example, it's 'better value' to buy a flat without an extended lease.


Lease length and ground rent has no impact on service charges - so I'm not sure why you say service charges will "DOUBLE".

It does. or it will do soon. No builder is going to give a flat owner or land owner a flat, with a 999 year lease and zero ground rent and allow a management company to have an income for life that's peanuts. What will happen, service charge will increase and a premium sent to leaseholder

Lots of misunderstanding there.

• Ground rent goes to the freeholder - not the management company

• The service charge is your share of the bills - like buildings insurance, communal electricity, building repairs, admin costs. None of those are affected by the ground rent

For example, building insurance premiums don't increase as a result of a change in ground rent.

In simple terms, the management company's job is to add up all the bills to get a grand total - and then divide it amongst all the leaseholders. (A bit like when a group of people eat in a restaurant, and then divide the bill between themselves.)

The management company charge a fee for doing that, but it's not related to ground rent.


Maybe start a new thread about what service charges are, if you want to discuss that. 

If I was a freeholder and not getting ground rent or lease hold extensions fees anymore, I would be telling the management company there is a 10% admin fee to the freeholder for 50 years included in the service charge. it. the service charge is now £2 per square foot instead of 1.80!

eddddy

IAMIAM said:

eddddy said:

IAMIAM said:

eddddy said:

IAMIAM said:

This is interesting, I had heard that extending leases going forward takes the lease up to 999 years as a minimum and a permanent zero ground rent. Or is this in the pipeline. Either way, most people I know seem to be put off buying leasehold flats until the Ground Rent is zero for all and Leasehold length is 999 for all. This basically means, in my eyes, service charges are practically going to DOUBLE??? Is this new build only though??

The plan is that all leases will be extendable to 990 years - with zero ground rent.

But the leaseholder will still have to pay for the lease extension. So, as in the example mentioned above, a lease extension might cost £12k, but increase the flat value by £30k - so in that example, it's 'better value' to buy a flat without an extended lease.


Lease length and ground rent has no impact on service charges - so I'm not sure why you say service charges will "DOUBLE".

It does. or it will do soon. No builder is going to give a flat owner or land owner a flat, with a 999 year lease and zero ground rent and allow a management company to have an income for life that's peanuts. What will happen, service charge will increase and a premium sent to leaseholder

Lots of misunderstanding there.

• Ground rent goes to the freeholder - not the management company

• The service charge is your share of the bills - like buildings insurance, communal electricity, building repairs, admin costs. None of those are affected by the ground rent

For example, building insurance premiums don't increase as a result of a change in ground rent.

In simple terms, the management company's job is to add up all the bills to get a grand total - and then divide it amongst all the leaseholders. (A bit like when a group of people eat in a restaurant, and then divide the bill between themselves.)

The management company charge a fee for doing that, but it's not related to ground rent.


Maybe start a new thread about what service charges are, if you want to discuss that. 

If I was a freeholder and not getting ground rent or lease hold extensions fees anymore, I would be telling the management company there is a 10% admin fee to the freeholder for 50 years included in the service charge. it. the service charge is now £2 per square foot instead of 1.80!

You don't understand services charges at all.

I gave an overview in my previous post.

IAMIAM

eddddy said:

IAMIAM said:

eddddy said:

IAMIAM said:

eddddy said:

IAMIAM said:

This is interesting, I had heard that extending leases going forward takes the lease up to 999 years as a minimum and a permanent zero ground rent. Or is this in the pipeline. Either way, most people I know seem to be put off buying leasehold flats until the Ground Rent is zero for all and Leasehold length is 999 for all. This basically means, in my eyes, service charges are practically going to DOUBLE??? Is this new build only though??

The plan is that all leases will be extendable to 990 years - with zero ground rent.

But the leaseholder will still have to pay for the lease extension. So, as in the example mentioned above, a lease extension might cost £12k, but increase the flat value by £30k - so in that example, it's 'better value' to buy a flat without an extended lease.


Lease length and ground rent has no impact on service charges - so I'm not sure why you say service charges will "DOUBLE".

It does. or it will do soon. No builder is going to give a flat owner or land owner a flat, with a 999 year lease and zero ground rent and allow a management company to have an income for life that's peanuts. What will happen, service charge will increase and a premium sent to leaseholder

Lots of misunderstanding there.

• Ground rent goes to the freeholder - not the management company

• The service charge is your share of the bills - like buildings insurance, communal electricity, building repairs, admin costs. None of those are affected by the ground rent

For example, building insurance premiums don't increase as a result of a change in ground rent.

In simple terms, the management company's job is to add up all the bills to get a grand total - and then divide it amongst all the leaseholders. (A bit like when a group of people eat in a restaurant, and then divide the bill between themselves.)

The management company charge a fee for doing that, but it's not related to ground rent.


Maybe start a new thread about what service charges are, if you want to discuss that. 

If I was a freeholder and not getting ground rent or lease hold extensions fees anymore, I would be telling the management company there is a 10% admin fee to the freeholder for 50 years included in the service charge. it. the service charge is now £2 per square foot instead of 1.80!

You don't understand services charges at all.

I gave an overview in my previous post.

I Do. There is some way in the future that freeholders will collect a fee not called ground rent or leasehold extensions.