Benefits of buying out leasehold?

Curiosity_cat

Hi Folks,

We’re in Northern Ireland and have been looking at whether it’s worth buying out the leasehold on our house.

There are over 900 years remaining and the annual ground rent is only £26, so on the face of it it doesn’t seem worth the stress, paperwork, and solicitor fees.

Am I missing any real benefits beyond not having to pay the yearly fee? From what I can see, it doesn’t seem to make much difference to the value of the house.

Paul

eddddy

I guess you mean you own the leasehold, and you're wondering about buying the freehold.

I'm not sure if leases / laws are different in Northern Ireland, but in England/Wales the benefit of buying the freehold might be that you are no longer bound by the covenants in the lease.

For example, a lease might say:

• No internal alterations, or no internal alterations without the freeholder's consent
• No subletting
• No running a business from the house

And you could/should be free of those types of covenants, if you buy the freehold.

But as I say, the situation might be different in NI.

monkey-fingers

https://forums.moneysavingexpert.com/discussion/comment/81919046#Comment_81919046

Some of the housing leases say ridiculous things like not being able to have a shed.

I've seen others that say no commercial vehicles, sign-painted vehicles (which is frankly ridiculous). No antennas or sky dishes. Alterations of gardens and all kinds of things.

user1977

https://forums.moneysavingexpert.com/discussion/comment/81920155#Comment_81920155

Those aren't really anything to do with the type of tenure, freehold properties will have the same restrictions.

eddddy

monkey-fingers said

Some of the housing leases say ridiculous things like not being able to have a shed.

I've seen others that say no commercial vehicles, sign-painted vehicles (which is frankly ridiculous). No antennas or sky dishes. Alterations of gardens and all kinds of things.

Those types of covenants might get moved across to the freehold.

For example, if you buy your freehold by the statutory route (statutory enfranchisement), the current freeholder can ask the tribunal to allow covenants which benefit other properties to be included in the freehold.

So the current freeholder might argue that not allowing sheds benefits other properties, because it keeps the estate looking smart and desirable.

But covenants which don't benefit other properties should be removed.

Or if you buy the freehold by the informal route there are no rules. So the current freeholder might try to include existing covenants and maybe even invent a few new ones.

(Or the current freeholder might not care, and be happy for all covenants to be scrapped.)