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What's the point of buying a Leasehold property?

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  • diystarter7
    diystarter7 Posts: 5,202 Forumite
    1,000 Posts First Anniversary Name Dropper
    Ath_Wat said:
    Ath_Wat said:
    Apologies if it's already been said, but I think the most important point is to not let a lease get below 80 years, as past that point it becomes much more expensive to extend.   And also is the point the property value will drop due to mortgage companies not liking it.  Unfortunately a lot of people don't realise this. 

    I did extend the lease on my last flat and tried to tell a neighbour the pitfalls of not doing so, but she didn't see why she should spend the money, until it got to 74 years and she ended up on a standard variable rate on her mortgage as she couldn't get a new deal.  Ended up costing her a lot more than she needed to.




    A great post highlighting the massive pitfalls of a lease on a house where you do not really need one.
    You "need one" if the house you want to buy has one.  Nobody is suggesting that everyone rush to buy leasehold houses,.  Everyone knows it's not a positive.  What people are saying is that when you buy any house the advantages it has to you can outweigh the disadvantages, even if one of those disadvantages is that it is leasehold.
    As with others here, we are just highlighting negatives. As far as I can see, there are NO positives buying a leasehold house,
    just negatives.
    Yes, everyone knows that.  In the same way having a window that won't open is always a negative, but that doesn't mean nobody should ever buy a house with a window that won't open.  It's a negative that can be factored in and doesn't overrule all else.
    It's a massive negative and one the vast majority would run several miles from.
    Leases can slow up, must up, and frustrate both sellers and buyers alike.

    I've known people buying a leasehold flat thinking its a stepping stone to house and only there for a couple of years and circumstances change they are lumbered with it often fees rising etc

    Unless I was buying to flip and got a massive discount I'd steer clear.
    Recent new re newer houses sold with leases it was a massive profit-making scheme imo were many buried their heads in the sand possibly thinking they'd soon move. Then they were/are shackled hard to the property as no one wants to pay a mortgage, bills, council tax, maintenance/repairs and then have another hefty bill for the lease that could easily rocket, best avoided.

  • user1977
    user1977 Posts: 17,636 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    Ath_Wat said:
    Ath_Wat said:
    Apologies if it's already been said, but I think the most important point is to not let a lease get below 80 years, as past that point it becomes much more expensive to extend.   And also is the point the property value will drop due to mortgage companies not liking it.  Unfortunately a lot of people don't realise this. 

    I did extend the lease on my last flat and tried to tell a neighbour the pitfalls of not doing so, but she didn't see why she should spend the money, until it got to 74 years and she ended up on a standard variable rate on her mortgage as she couldn't get a new deal.  Ended up costing her a lot more than she needed to.




    A great post highlighting the massive pitfalls of a lease on a house where you do not really need one.
    You "need one" if the house you want to buy has one.  Nobody is suggesting that everyone rush to buy leasehold houses,.  Everyone knows it's not a positive.  What people are saying is that when you buy any house the advantages it has to you can outweigh the disadvantages, even if one of those disadvantages is that it is leasehold.
    As with others here, we are just highlighting negatives. As far as I can see, there are NO positives buying a leasehold house,
    just negatives.
    Yes, everyone knows that.  In the same way having a window that won't open is always a negative, but that doesn't mean nobody should ever buy a house with a window that won't open.  It's a negative that can be factored in and doesn't overrule all else.
    It's a massive negative and one the vast majority would run several miles from.

    If it were really the case that the "vast majority" of buyers would run a mile from any leasehold property, irrespective of the terms of the lease, then surely they wouldn't generally be regarding as marketable and mortgageable? 
  • diystarter7
    diystarter7 Posts: 5,202 Forumite
    1,000 Posts First Anniversary Name Dropper
    edited 24 June 2022 at 1:02PM
    user1977 said:
    Ath_Wat said:
    Ath_Wat said:
    Apologies if it's already been said, but I think the most important point is to not let a lease get below 80 years, as past that point it becomes much more expensive to extend.   And also is the point the property value will drop due to mortgage companies not liking it.  Unfortunately a lot of people don't realise this. 

    I did extend the lease on my last flat and tried to tell a neighbour the pitfalls of not doing so, but she didn't see why she should spend the money, until it got to 74 years and she ended up on a standard variable rate on her mortgage as she couldn't get a new deal.  Ended up costing her a lot more than she needed to.




    A great post highlighting the massive pitfalls of a lease on a house where you do not really need one.
    You "need one" if the house you want to buy has one.  Nobody is suggesting that everyone rush to buy leasehold houses,.  Everyone knows it's not a positive.  What people are saying is that when you buy any house the advantages it has to you can outweigh the disadvantages, even if one of those disadvantages is that it is leasehold.
    As with others here, we are just highlighting negatives. As far as I can see, there are NO positives buying a leasehold house,
    just negatives.
    Yes, everyone knows that.  In the same way having a window that won't open is always a negative, but that doesn't mean nobody should ever buy a house with a window that won't open.  It's a negative that can be factored in and doesn't overrule all else.
    It's a massive negative and one the vast majority would run several miles from.

    If it were really the case that the "vast majority" of buyers would run a mile from any leasehold property, irrespective of the terms of the lease, then surely they wouldn't generally be regarding as marketable and mortgageable? 
    Sadly ignorance can be a factor at times and people cant see beyond their nose. I won't bore you with those bleating on about the hikes in lease charges but its there in the public domain.

    Ask yourself this and this is aimed at the others as well that can't see the problem with leasehold houses, why are they banning the sale of new leasehold houses? 
  • Section62
    Section62 Posts: 9,530 Forumite
    1,000 Posts Fourth Anniversary Name Dropper

    Sadly ignorance can be a factor at times and people cant see beyond their nose. I won't bore you with those bleating on about the hikes in lease charges but its there in the public domain.

    Ask yourself this and this is aimed at the others as well that can't see the problem with leasehold houses, why are they banning the sale of new leasehold houses? 

    For broadly the same reasons "they" introduced a price cap on domestic energy supplies.

    Remind me, how well did that work out?  Did it address the fundamental "problem"(s)? Or did it create a new set of problems?

    The fact any government legislates for something doesn't necessarily make it necessary, or necessarily a good idea.
  • tryingmybest99
    tryingmybest99 Posts: 80 Forumite
    Second Anniversary 10 Posts Name Dropper
    edited 24 June 2022 at 1:51PM
    I feel like there is a bit of a misunderstanding/ people talking at cross purposes in this thread. The OP asked about the point of buying leasehold property, not houses specifically. I am glad that it appears that some people in this thread are happy with their leasehold houses, but to be honest, if I could afford a house I would definitely choose a freehold (even if it is smaller or in a worse area). Some of the situations that leaseholders of houses have been put in, especially in new developments sound like a horror show. I could never deal with that personally, so I definitely agree with you there diystarter7, but other reasonable people may come to a different conclusion to me.

    But considering the original question is about property in general, I would defend those of us who have chosen to buy a leasehold flat. I can't afford a house, so asking why I bought a leasehold rather than freehold is like asking why I went on a staycation rather than going to New Zealand for my holidays. The leasehold system is far from ideal and full of traps, but I can only do my best as a person working within that system. The choice for me was renting or this. This way I have a place that feels like home and equity building up. It has been a lot of work to make sure my conveyancer checked the lease properly, and I had to do a lot of research about ground rents, service charges and lease extensions to ensure I understood what was going on. It has been very stressful! I am still worried about the future! But I know people who had significant problems as freeholders, and people who had significant problems as flat owners who had share of freehold. We are all just trying to make the best decisions with the information we have at the time. I live alone and I don't think I will ever have (or need) a house, I just want to feel financially safe. The ideal for me is if one day in the future, I can either buy a commonhold flat or set up a commonhold with the other leaseholders in my current small block of flats.  
  • Ath_Wat
    Ath_Wat Posts: 1,504 Forumite
    1,000 Posts Name Dropper
    edited 24 June 2022 at 2:39PM
    Ath_Wat said:
    Ath_Wat said:
    Apologies if it's already been said, but I think the most important point is to not let a lease get below 80 years, as past that point it becomes much more expensive to extend.   And also is the point the property value will drop due to mortgage companies not liking it.  Unfortunately a lot of people don't realise this. 

    I did extend the lease on my last flat and tried to tell a neighbour the pitfalls of not doing so, but she didn't see why she should spend the money, until it got to 74 years and she ended up on a standard variable rate on her mortgage as she couldn't get a new deal.  Ended up costing her a lot more than she needed to.




    A great post highlighting the massive pitfalls of a lease on a house where you do not really need one.
    You "need one" if the house you want to buy has one.  Nobody is suggesting that everyone rush to buy leasehold houses,.  Everyone knows it's not a positive.  What people are saying is that when you buy any house the advantages it has to you can outweigh the disadvantages, even if one of those disadvantages is that it is leasehold.
    As with others here, we are just highlighting negatives. As far as I can see, there are NO positives buying a leasehold house,
    just negatives.
    Yes, everyone knows that.  In the same way having a window that won't open is always a negative, but that doesn't mean nobody should ever buy a house with a window that won't open.  It's a negative that can be factored in and doesn't overrule all else.
    It's a massive negative and one the vast majority would run several miles from.
    Leases can slow up, must up, and frustrate both sellers and buyers alike.

    I've known people buying a leasehold flat thinking its a stepping stone to house and only there for a couple of years and circumstances change they are lumbered with it often fees rising etc


    It really is not something "the vast majority would run several miles from".  It's the norm in many areas, even for houses.

    I couldn't tell you how many people I know who have bought leasehold flats.  It's a lot.  I know a fair few who have bought leasehold houses.  I don't personally know of anyone who had any problem at all selling them and moving on.  Anecdotal evidence, eh.  I know problems do occur but you are massively overstating the case.  Maybe your personal experience is not as representative as you believe.

  • Ath_Wat
    Ath_Wat Posts: 1,504 Forumite
    1,000 Posts Name Dropper
    edited 24 June 2022 at 2:48PM
    user1977 said:
    Ath_Wat said:
    Ath_Wat said:
    Apologies if it's already been said, but I think the most important point is to not let a lease get below 80 years, as past that point it becomes much more expensive to extend.   And also is the point the property value will drop due to mortgage companies not liking it.  Unfortunately a lot of people don't realise this. 

    I did extend the lease on my last flat and tried to tell a neighbour the pitfalls of not doing so, but she didn't see why she should spend the money, until it got to 74 years and she ended up on a standard variable rate on her mortgage as she couldn't get a new deal.  Ended up costing her a lot more than she needed to.




    A great post highlighting the massive pitfalls of a lease on a house where you do not really need one.
    You "need one" if the house you want to buy has one.  Nobody is suggesting that everyone rush to buy leasehold houses,.  Everyone knows it's not a positive.  What people are saying is that when you buy any house the advantages it has to you can outweigh the disadvantages, even if one of those disadvantages is that it is leasehold.
    As with others here, we are just highlighting negatives. As far as I can see, there are NO positives buying a leasehold house,
    just negatives.
    Yes, everyone knows that.  In the same way having a window that won't open is always a negative, but that doesn't mean nobody should ever buy a house with a window that won't open.  It's a negative that can be factored in and doesn't overrule all else.
    It's a massive negative and one the vast majority would run several miles from.

    If it were really the case that the "vast majority" of buyers would run a mile from any leasehold property, irrespective of the terms of the lease, then surely they wouldn't generally be regarding as marketable and mortgageable? 
    Sadly ignorance can be a factor at times and people cant see beyond their nose. I won't bore you with those bleating on about the hikes in lease charges but its there in the public domain.

    Ask yourself this and this is aimed at the others as well that can't see the problem with leasehold houses, why are they banning the sale of new leasehold houses? 
    It's because developers have been using them completely unnecessarily as a licence to print money.  We all agree that it's best not to have leasehold if there's no need for it.

    However - and I'll say this once more - if the house you want to buy is already leasehold then it's just another factor to take into the equation and not, as you keep claiming, a reason to automatically "run several miles".

    And nobody "can't see the problem with leasehold".  They can just see how to mitigate and manage that problem if other things about a house make it worth their while doing so.
  • jelajelavic
    jelajelavic Posts: 72 Forumite
    Tenth Anniversary 10 Posts Name Dropper Combo Breaker
    edited 24 June 2022 at 3:08PM
    I think a key point the OP has missed is thinking that leasehold properties lose value for each year of the lease so is just like renting in that although the mortgage decreases so does the value of the property so overall no gain. However, excluding those with short leases (ie below 70/80 years), properties can and do go up in value. and follow general property trends for the area (maybe not exactly but along the same trendline). 

    I am selling my leasehold flat and the value has gone up in 6 years, so I will make a profit. And if that's your only option, there's a reason to buy one.

    I think its been mentioned already but there's a big difference between leasehold houses and leasehold flats, where most flats are indeed leasehold. And not all leasehold houses are bad but there's certainly been a few dodgy contracts in recent years.

    If its all you can afford and its in the area you want, then leaseholds are fine as long as you are comfortable with the terms.

    And safe to say you can be less wary of leasehold flats as its fairly standard (but still read the T&Cs!!)
  • TripleH
    TripleH Posts: 3,188 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    user1977 said:
    Did the leases require freeholder consent? There's no implication that consent is required, and generally with that sort of ultra-long lease there are few covenants to comply with. After all, if there's an opportunity to make money by e.g. charging for consents, there's less likelihood of the freeholder losing interest with their investment.

    In any event, that sort of thing can generally be insured against, if you're concerned about the risk of a freeholder crawling out of the woodwork and quibbling about past breaches.
    I have no idea. We only rented the property and this was from talking to our neighbour who owned their house. My thoughts were more on what would happen where the freeholder has 'vanished' and as another disadvantage for leasehold properties although I suspect this is more an issue with houses rather than flats.
    We're lucky we live in a freehold property.

    May you find your sister soon Helli.
    Sleep well.
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