Leasehold Pro's and Con's.

startrim

I own a modest freehold property in the midlands.
My Mother lives in the west country and I would like to move nearer to her.
It is currently a 7 hour drive so up to a 2 hour drive will suit me.
Because of the difference in prices for the above areas I will be looking to buy a flat,
a couple of them I am interested in are freehold but the vast majority are leasehold.
I have had 1 new leasehold property before that had 999 years left on it.

What would be the advantages and disadvantages of buying a leasehold property?

hazyjo

They may be 'share of freehold', but they're still leasehold with a lease. A pure freehold flat is usually unmortgageable (in England).

There's not a one-size-fits-all, so not easy to answer. But to give you some ideas re leasehold:

Someone else may organise the maintenance and general upkeep - but that's a bit of a double edged sword. Some may think that makes their life easier, but you often pay a fee on top, plus the freeholder or management company may be choosing when any works need doing.  More cons, leases obviously reduce in years. Can be expensive to renew. May be tighter restrictions on what you can do to/with the property (eg knocking down walls / renting it out). Flats usually have other people up/down/to the side of them. Houses tend to just be to one or both sides (or detached). Less likely to have a garden. Other people sharing the building - can be noisy, messy, annoying.

Basically, if you can afford a house, get one. If not, then you take the compromises that come with leasehold. I had 2 when I first bought as I couldn't afford a house. Some choose to retire to flats as it can make for an easy life re maintenance/size (albeit at a cost).

Tiglet2

Houses - you pay for the maintenance of it at a price and time you can afford.  No ground rent.

Flats - you pay for maintenance by way of a service charge at a price and time set by the freeholder/managing agent.  You don't own the ground that the flat sits on, so you pay ground rent to the freeholder.

In England, flats are leasehold only, but some come with a 'share of freehold'.  Share of freehold can mean one share in the management company who look after the block, or it can mean you acquire the shared freehold along with the other owners in a small block.

Look at reviews for the management company.  There are a number that don't have good reviews.

Download the title deed from Land Registry to find out the date when the lease started from and how many years on the lease is remaining.
Purchase the lease from Land Registry to find out what the ground rent fee is and whether it increases over time, by how much and how often.

Ask the owner of the flat what their service charges are per month/per year to give an idea to you of how much this will be.

Flats with a concierge, a gym, underground parking, lifts will have much higher service charges, due to the cost of maintenance etc.

Leases that only have 80 years or less remaining will need extending.  You can ask the current leaseholder to start the process and you finish after completion.  Otherwise you have to wait two years of ownership before you can extend.  Generally, it is better to extend the lease by way of a formal extension rather than informal.

Obviously a 999 year lease is preferred, but you often won't know unless the vendor/EA tells you or you have downloaded the title.

Check ground rent.  Some terms are onerous to lenders, but new laws state that new build flats have peppercorn ground rents.

I'm sure other more experienced forum experts will be along with further information.

startrim

Thank-you both for the detailed replies, I appreciate it.

I do spend a lot of time and effort maintaining my gardens, as much as I like plants I would rather
not have gardens to maintain.
A lock up and go flats does seem appealing.
I cannot think of many other positives to owning a flat over a bungalow.

I understand that buying a leasehold property can be more work for a Solicitor and some do not want to undertake the work.
The flat I owned for 18 months over 10 years ago was new, the builder was difficult to deal with when there were faults, the management company was not paying the bills (he went to prison), it was mixed, some owned, some rented and some did not respect the building or communal areas. Apart from that I did like the flat and lifestyle.
Noise was an issue as it was a wooden construction. I would prefer a flat with concrete floors (rare).

So, lease length is important, near 80 is bad and will need renewing.
The maintenance charges vary from about £700 to the most expensive I have seen £4000 per annum.
I did not know you could search and download the tile deeds from the land registry so thanks for that.

Alderbank

startrim said:

A lock up and go flats does seem appealing.
I cannot think of many other positives to owning a flat over a bungalow.

City life is appealing to many people nowadays, with clubs, bars and entertainment within walking distance. No need for car, etc.

You don't see many bungalows for sale in city centres.

NameUnavailable

Benefits of a flat are that someone else looks after the building and grounds (although you still pay for it all). It can be more secure than a house if you are away a lot and obviously in many cases it will be a matter of budget (I can't afford a house where I live).

After a nightmare with my last leasehold property, due to the freeholder being totally unreasonable and indeed criminal, I vowed not to buy another purely leasehold property.

My new flat is a shared freehold so the management company works for the residents and it's so much better! There is a 990 year lease and no ground rent.

So my advice is to buy a shared freehold flat, look for one in a building/block that looks well maintained. Avoid new build with cladding issues or higher rise blocks with expensive lifts etc.

Also, if you are moving to be nearer to your Mother I would suggest being as near as you can within reason. A 4 hour return trip isn't really that near to be 'on hand' and as our parents get older they tend to rely on us more and more. Being half an hour away would make your life a lot easier.