Freehold & leasehold

Ruth03

Found the perfect house in the location we’ve been searching for but then found out it’s leasehold with quite a high ground rent. The current owners have agreed to buy the freehold (we will be paying for this) but then found out there’s also a management company & a service charge that has to be paid. It’s just a small road with only a bit of shared green space but the road is currently unadopted - the council should be adopting the road at some point.
I’ve then found out that the house will be freehold & leasehold and the titles won’t be able to be merged as there always needs to be a management company which it states in the lease. There’s a restriction in favour of the management company.
Am I being over the top, or would this put a lot of people off? Once the road is adopted, I just can’t see why there would be a need for a management company paying £300 a year.

Ribosome

Do not buy a leasehold property. Just don't do it. You'll have nothing but trouble if you decide to sell on. 

macman

Ribosome said:

Do not buy a leasehold property. Just don't do it. You'll have nothing but trouble if you decide to sell on. 

That doesn't seem to have deterred thousand of home owners in central London who bought leasehold properties for very high prices. There is nothing intrinsically wrong with leasehold, it depends on what it consists of in terms of remaining lease, ground rent and possible service charges.

Woolsery

Ribosome said:

Do not buy a leasehold property. Just don't do it. You'll have nothing but trouble if you decide to sell on. 

I must've missed out on that then, along with all the other people who used to sell their houses almost overnight in the first place I bought. Poky little places about 82m2 and now well over £500k according to Rightmove.

You do realise you've encompassed a great range of situations, including ones where the groundrent is a peppercorn or so low no one's collected it for decades?

I'm not saying I'd buy any leasehold property; far from it, but nor would I make a sweeping and frankly misleading statement like that above.

user1977

macman said:

Ribosome said:

Do not buy a leasehold property. Just don't do it. You'll have nothing but trouble if you decide to sell on. 

That doesn't seem to have deterred thousand of home owners in central London who bought leasehold properties for very high prices. There is nothing intrinsically wrong with leasehold, it depends on what it consists of in terms of remaining lease, ground rent and possible service charges.

And if you mean (as in the OP's case) "because it's got common charges attached to it", that's not really a freehold/leasehold issue.

london21

Freehold > Leasehold 

Leasehold can be Stress.

Avoid if you can afford to. 

eddddy

Ruth03 said:

I’ve then found out that the house will be freehold & leasehold and the titles won’t be able to be merged as there always needs to be a management company which it states in the lease. 

So I guess it's what's called a "tripartite" or "tri-party" lease.  i.e. a lease between 3 parties - the leaseholder, the freeholder and the management company.


There might still be benefits to owning the freehold as well as the leasehold, like...

• No need to get consent for alterations
• No need to pay ground rent

Plus - another benefit is that by keeping the lease you'll have more legal protection for service charges than a freeholder would.

As a leaseholder, you have the legal right to inspect invoices, have section 20 consultations, challenge service charges at a tribunal etc. A freeholder doesn't have those rights.


But are you buying the freehold because of an onerous ground rent, which is unacceptable to your mortgage lender? If so, you might still have to arrange a deed of variation for the lease.


(And be careful of people who just say things like 'don't buy a leasehold' without understanding what you're buying, and without giving any explanation.)

badmemory

I would certainly say that if there is a house that is freehold & one that's leasehold then no contest.  Freehold wins.