Buying the freehold of a house - worth bothering?

RD_DS

Most of the discussion about property leasehold relates to flats - total nightmare. In my situation, it's a leasehold semi-detached house; 950 years lease, costing £15 per year. There doesn't appear to be anything in the lease that permits that £15 to be increased - it certainly hasn't changed for the last fifty years. The wording of the lease already has us respoonsible for maintenance of the building, insurance, drains, etc. I think the only notable obligation is to inform them if we want to make any alterations.

I've asked for a quote to buy the freehold: approx £950, plus another grand for admin and legal costs (mine and theirs).

I'm fluctuating between thinking it will be a stupid waste of two grand, to thinking it would give us peace of mind and be a positive if we wanted to sell the place.

Any thoughts?

sammyjammy

One side f my street is leasehold and one half freehold, probably similar to yours, maybe its just me but I would never consider a leasehold house regardless of how much the lease is/how old it is so I would absolutely buy it for that price.

RD_DS

sammyjammy said:

One side f my street is leasehold and one half freehold, probably similar to yours, maybe its just me but I would never consider a leasehold house regardless of how much the lease is/how old it is so I would absolutely buy it for that price.

Thanks, Sammy. Is that based on any specific logic, or more a gut reaction? I probably felt similar when we bought the place but the 950 years, plus fixed £15 seemed trivial.

Peter999_2

To be honest I don't trust any leasehold companies.     It feels like when you are renting and just waiting for the section 21 to suddenly appear and you don't feel in control of where you live.

If you can easily afford the £2,000 I would definitely buy the leashold and then there is nothing to think or worry about.    I would presume it is easier to sell when it's no longer freehold, I would never buy any property that was leasehold after the nightmare I had with a flat.

RD_DS

Peter999_2 said:

To be honest I don't trust any leasehold companies.     It feels like when you are renting and just waiting for the section 21 to suddenly appear and you don't feel in control of where you live.

If you can easily afford the £2,000 I would definitely buy the leashold and then there is nothing to think or worry about.    I would presume it is easier to sell when it's no longer freehold, I would never buy any property that was leasehold after the nightmare I had with a flat.

Thanks, Peter. While I don't personally have those concerns (could be wrong), it's useful to get that insight as we don't want to put anyone off if we ever came to sell. I've asked a friendy local estate agent for their opinion, so that'll be interesting.

eddddy

RD_DS said:

I think the only notable obligation is to inform them if we want to make any alterations.

Is the requirement just to inform them? Usually leases require that you get consent for alterations.

Either way, the freeholder can charge you a fee - for processing your notice of alteration and/or granting you consent for alterations.

So buying your freehold would remove that hassle and any potential fees.

If there are other covenants like 'no subletting' or 'no running a business', they should disappear as well if you buy the freehold..

RD_DS said:

I've asked for a quote to buy the freehold: approx £950, plus another grand for admin and legal costs (mine and theirs).

If you went down the 'statutory route', a tribunal would probably value the freehold at around £300. But  your legal fees might be higher, so it might work put the same (or more expensive) overall.

But the freehold is pretty much worthless to your freeholder. So you could try to persuade them that you wont go ahead for £950, but you might if the price was £500 (or whatever). It might work!

RD_DS

eddddy said:

RD_DS said:

I think the only notable obligation is to inform them if we want to make any alterations.

Is the requirement just to inform them? ...

RD_DS said:

I've asked for a quote to buy the freehold: approx £950, plus another grand for admin and legal costs (mine and theirs).

If you went down the 'statutory route', a tribunal would probably value the freehold at around £300. But  your legal fees might be higher, so it might work put the same (or more expensive) overall.

But the freehold is pretty much worthless to your freeholder. So you could try to persuade them that you wont go ahead for £950, but you might if the price was £500 (or whatever). It might work!

Yes; we did have to inform them and get permission to add an extension. Good point. 

I hadn't really thought about haggling on the £950. I was mainly bothered about the legal/admin fees as I can't imagine it being excessively complex. Worth considering, mind.

sammyjammy

RD_DS said:

sammyjammy said:

One side f my street is leasehold and one half freehold, probably similar to yours, maybe its just me but I would never consider a leasehold house regardless of how much the lease is/how old it is so I would absolutely buy it for that price.

Thanks, Sammy. Is that based on any specific logic, or more a gut reaction? I probably felt similar when we bought the place but the 950 years, plus fixed £15 seemed trivial.

Just gut and to avoid any future hassle.  Think many feel like me so on resale it limits your buyer pot.

oystercatcher

There are loads of leasehold houses where I live and the estate agents say it doesn't make much difference and it doesn't seem to affect the prices at all either. I bought and sold a leasehold house a good few years ago with no problems, then had a freehold place for a few years , then this place I bought leasehold but after a few years I was offered to buy the freehold and I decided I preferred the security It cost a couple of thousand I believe including the conveyencing and I only save £5 a year ground rent but I prefer that this is now 'mine' properly and I believe a leasehold might put off some buyers if we sell, as mentioned above. I'm not sure if I wasted money but I am happy with the situation.
We have a Heritage Foundation who control what we can do to our properties anyway freehold or leasehold so that doesn't make much difference here. It's just a bit like living in a conservation area , but that makes it a nice place !

Tabieth

All I know is my experience. I’ve just bought a freehold terraced house. When I was flat/house hunting I wouldn’t even go and see a leasehold house. As soon as I realised it wasn’t freehold I lost interest. I don’t think I’m alone there so that limits the number of prospective buyers. 

And I have to say I like the security of knowing I completely own my house and I’m not at the mercy of the management company / freeholder. It’s a real sense of security. 

So my (non expert) advice would be to but the freehold. 

ripplyuk

I wouldn’t bother. This is not like the usual leasehold on a flat with fees rising each year and dealing with management companies etc. It’s only £15 a year and isn’t causing any problems. It doesn’t seem like you’d gain anything and I can think of better ways of using £2K. Leasehold will reduce the amount of potential buyers although I don’t think that will be a huge issue when they see this particular lease. It’s only an issue if you’re planning to sell in the near future.