What's the point of buying a Leasehold property?

hazyjo

Just to clarify as not clear in your post, you do keep the equity/profit just like you would with a freehold property. Prob stating the obvious, but from your post I'm not entirely sure you know.

Say you buy a flat with 140 years left on the lease for £200k. Sell 10 years later for 300k, that profit is yours (simplifying things here and ignoring mortgages, fees, etc, but that's basically it).

A property with 130 years or 140 years left on the lease isn't really going to differ in value. You get the same profit from it (or losses!).

tryingmybest99

I would love England to have more commonhold or an alternative to leasehold which is based on old laws and it feels like there are so many traps or issues e.g. rising ground rents, issues with service charges. But if you want a flat (especially a purpose-built one), you are probably going to be getting a leasehold flat. I would love a freehold house! But I can't afford one so it's leasehold (where I can build up equity) or it's renting (where I pay off someone else's mortgage) for me. And leaseholders seem to be getting more rights. 

diystarter7

A lot of inaccurate info here re the lenght of leases.
It's not 999 years as posted by some but 125 years, in London it is on apartments built 20/30/35 years ago

In central london they were 999 years but the majority in london are 125 years.

As another stated, leases serve a purpose in blocks of flats as land is shared as are communal areas. However, houses and a lease is taking the p.

Never buy a leasehold house but if its a flay, more often than not its a lease type but you can get blocks, and conversions where the freehold is shared between the owners.

tealady

diystarter7 said:

Never buy a leasehold house but if its a flay, more often than not its a lease type but you can get blocks, and conversions where the freehold is shared between the owners.

I bought a leasehold house (Midlands)
Ground rent was less than £100 a year and lease would have expired when I was well into retirement age.
The company was looking to offload the leases so approached me with an offer, I paid them and now own the freehold.
Have no dependants so dont care what happens when I die ( do have a will though)
So leasehold isn't always a bad thing.

Megaross

I echo your sentiments, first place I bought was leasehold and absolutely regretted it.

I don't mind a 999 year lease thats £3 a year or something. That's "as good as" freehold.

But absolutely I wouldn't buy a modern leasehold on the basis they're a bit of a ripoff - my lease payments were due to nearly double when I sold it. Service charges were stupid and all they really did was hoover - I trimmed the hedges and weeded the paths because they never sent a gardener.

And what, 175 years left on it? That's not much, soon be an expensive worthless lease making the property hard to sell.

Part of owning a property to me is you bloody well own it and whatever lucky person inherits it when I kick the bucket can just leave it to rot and it doesn't matter. Obviously better they sell or use it but the point is it's their property and their choice.

Every mans home is his castle and all that, leasehold you don't get that. Freehold is clearly the winner if you can afford it

nyermen

In general, Id say there's no benefit to the purchaser of a leasehold house.  Plenty of benefit to the house builder / freeholder as they sell on freeholds / estate rent charges / etc. 

There are exceptions (unadopted roads, maintenance of decent common green spaces etc, although those examples should be estate rent charge rather than leasehold).  

Obviously flats are a different situation.  I'd like a principle for all properties that any such setups (leaseholds, estate rent charges etc) should be owned by the purchasers (eg. through a management company that they all own) rather than third parties who's only interest is $$$.

mojo293

I am in the process of selling a Freehold house and buying a Leasehold.

After viewing a number of properties, and having considered a new build, this seemed a decent option as the house gives me what I need, but is also only 6 years old, so still almost a new build.

The current lease has about 147 years left, and the ground rent is currently £205pa reviewed every 15 years, so next review is scheduled for 2029. The vendors say they enquired about buying the freehold a couple of years ago and were quoted "a couple of thousand for it".

I do intend to pursue this option myself once I've been in long enough (believe I have to have beent he leaseholder for at least 2 years before I can extend the lease or buy the freehold?)

If the price quoted at the time is reasonable enough, I will buy the freehold, as I suspect that will add value to the property anyway, but also make it potentially a little easier to sell in furture.

diystarter7

tealady said:

diystarter7 said:

Never buy a leasehold house but if its a flay, more often than not its a lease type but you can get blocks, and conversions where the freehold is shared between the owners.

I bought a leasehold house (Midlands)
Ground rent was less than £100 a year and lease would have expired when I was well into retirement age.
The company was looking to offload the leases so approached me with an offer, I paid them and now own the freehold.
Have no dependants so dont care what happens when I die ( do have a will though)
So leasehold isn't always a bad thing.

It is a "bad thing" for the vast majority and you don't have to look far as it was in the news about houses being sold on leases and these were rocketing.
Best avoided at all costs, IE houses but often you cant avoid a lease on a flat.

I believe the law has changed re leases though not enough to ensure leaseholders don't get trapped in rocketing costs and unable to sell a property.

Woolsery

diystarter7 said:

A lot of inaccurate info here re the lenght of leases.
It's not 999 years as posted by some but 125 years, in London it is on apartments built 20/30/35 years ago

In central london they were 999 years but the majority in london are 125 years.

The country extends beyond London. My info was 100% accurate, relating to a house built in 1898 and rebuilt in 1948. It was in Bath; like many others built on land owned by a charitable trust. I believe there are thousands of older leasehold houses in the NW around Manchester.

Of course, more modern leases are different and the problems with 'rocketing costs' are well documented. You can't paint the two things with the same brush.

diystarter7

Woolsery said:

diystarter7 said:

A lot of inaccurate info here re the lenght of leases.
It's not 999 years as posted by some but 125 years, in London it is on apartments built 20/30/35 years ago

In central london they were 999 years but the majority in london are 125 years.

The country extends beyond London. My info was 100% accurate, relating to a house built in 1898 and rebuilt in 1948. It was in Bath; like many others built on land owned by a charitable trust. I believe there are thousands of older leasehold houses in the NW around Manchester.

Of course, more modern leases are different and the problems with 'rocketing costs' are well documented. You can't paint the two things with the same brush.

I disagree and my post was aimed at several people. No one stated that your finding only referred to a particular area.
There are aproximatel 9 million people in London, that a lot of property.

You've only expanded on your post now and with that I see your point but not your original post.

Re "rocketing costs" or other problems, the vast majority of people would run a mile form a leasehold house