Just a quickie

Marky4040

Leasehold flat, First floor (3 floors), one of 18 flats in 2 blocks of nine, surrounded by nice gardens, also comes with a garage.

6million year lease haha (999) no ground rent, £1500 per annum service charge, £50k mortgage remaining, worth £130K.

I'm a little nervous reading all the stuff about "Leasehold anything"…..Am i ok? Flip flopping between staying till mortgage is paid (3 years) or buying a house instead.

Ta.

gwynlas

A house will always be more desireable than a flat but you have a virtual freehold with 999 lease and no ground rent.

Do you own a share of freehold and manage block or is it an external managing agent?

TroubledTarts

Buy a house if that's what you need in the foreseeable future when you can imo.

El_Torro

The main reason leaseholds get a bad rep is because in theory the service charge can shoot up and you have no choice but to pay whatever the invoice says. This has been a massive problem for some people.

£1,500 a year for a £130k flat already sounds on the high side. Has it always been this high?

If you have been here for some years without issue you should be OK. There are risks with sticking around, but then there are risks with everything. Including buying a freehold house.

What do you plan to do when the mortgage is paid off? Don't think that the risk of owning a leasehold is reduced just because you don't have a mortgage.

Marky4040

No share of the freehold.

Service charge went up £200 from 2025 to 2026, April to April.

Management company based in same city and they do keep everything maintained and fix things quickly to be fair.

Someome died in probate so we're paying for that flat too at the moment.

When my mortgage is paid my plan is to buy and live abroad.

gm0

Yes it's high as % of value. But with 2x9 = 18. And two blocks. n for 1/n is low.

There are two roofs as 1/9 (if by block as is common) or 1/18 if estate wide. LEASE.

Lifts can get pricey - maintenance repairs/call outs then replacement - if you have them once they are old. No lifts would be a good sign for costs and obviously painful in terms of accessibility. 25 years is not a surprisingly short life for lifts. There are better. And worse. Usage dependent as well. Day to day and removals (frequency of).

Automated driveway gates ditto. Again if absent - this is good for cost.

Intercoms. Same again.

It may be high. And go higher at year 25-35. Because - that's what it costs. Not because fleecehold.

Overheads and doing it all insured/by the book and agent profit and cosy supplier groups - may add more to the bill for sure. The fleecehold bit (where ground rent isn't a factor). That is a separate issue on top of what these blocks will just cost over 999 years. Which you are on the hook for regardless while you own the lease.

Second part is also why RTM and Share of Freehold exists.

But you need to

a) do Right to Manage as a group

and/or

b) buy the freehold across the 18 (a decent amount of money with 18). Places that do it often have a save up levy for a few years and a loan repayment levy for a few more - to pay off the purchase. Now you own the site, land communal bits as a collective and your demised spaces as leases. No 3rd party.

c) get organised to run it or still more likely hire an agent which you now control yourselves via two volunteer directors and voting across the 18. Who collect money, do lift contracts, painting, trees, hedges/gardens, insurance, fire safety inspections and legal obligations etc.etc.

Regardless of management approach WHEN not if you need a new lift. You need a new lift. It is what it is.

With 18 I'd be dubious about SOF because of wanting to find 2 or more directors continuously. As with split houses and 2-3. We are still on the cusp here of "make everyone do it" so a mad person or faction cannot take a grip or indeed end up with nobody. It would require care based on the demographics. Landlords. Young working age. Retirees. Overseas lock up and leaves.

A bad SOF or RTM without consistent leadership and more than one for when someone leaves or dies gets captured by its agent and a form of rent seeking behaviour i.e fleecehold resumes. Bad job done at high cost. Agent feels secure as the only one with information a new director looking lost every 18 months who finds a reason to drop back out.

In your shoes - I'd be curious about the reserves / sinking fund - the more so if its more than 10-15 years old and the things I flagged exist.

Windows/doors and structure bricks/cladding/paintwork - you can look at and take a view if it's being kept up adequately in current cost.

Upgrades - car chargers etc. Are another country again

Marky4040

Thanks very much.

No lifts, no electric gates, yes has intercom, building and windows in really good condition.

Got some solar panels on the roof but I'm not sure what the deal is with them.

martindow

Presumably there are annual statements or accounts giving a breakdown of the £1500. Where is the money going? Hopefully some of that is building up a sinking fund (which is probably a good thing).

gm0

Then ideally with the current fee you should be gently saving up for windows and path paving and a bit for tree surgeons (if you have any) and that's about it. And normal stuff. Buildings insurance. Alarms and electrical and fire door inspection. Communal energy. Cleaning. Gardening etc. Tree surgeon inspection. Agent fee. Other freeholder legal periodic obligations.

If reserves are building slowly over 25-30 years then no shock Section 20 to leaseholders for the whole project cost which could land as a 5-10k each bill (varies with height, number of units - technology, scaffold etc). With 18 you are not high rise. So that's another win. Reserve may cover some. Or all. Impossible to know 20 years ahead.

And if it's just a fee for current spending. Then that Section 20 for windows is in your far future. And maybe - just maybe. There ought to be £100 on the bill each year. x18 to start saving for it. Which is one for discussion. The lease will allow this - or make it harder. Not worth discussing if it can't easily be done. Some people like the big random bill later and not paying the 100 along the way. Some like saving up and reducing in year shock bill potential. With Share of Freehold you can decide democratically between you holding your freehold company member/share hats (not your leasehold ones). Normally a one to one arrangement of lease = has a membership or share which moves when the lease is assigned is used). With this regular pre RTM or SOF setup the freehold agent is collecting resident opinions and doing something about it - or indeed not doing anything about it. As you are not their customer nor hold their contract. So they can easily say - opinion is divided, pass that back to freeholder and sit on their hands.

Even if it isn't building reserves. Still not terrible. Because the future replacement liabilities aren't enormous. Not much stuff = not much stuff to replace.

But check accounts / budget. Categories not down to invoices. A decent agent will present the spending by category with the explanation of the rises and totals for next year. As it shows residents things as they change such as buildings insurance, the communal energy bill etc…..so the budget has changed…. Doesn't stop moaning but some visible x has happened so y - explaining eases it. Full transparency is rare. Because there is always a risk of the nitpicker as a hobbyist. And no agent wants to live there at transaction level for each and every call out and response to a trouble ticket spending more of their money debating trivia with a relentless retiree moaner with a background in audit. Best not feed the troll. Industry practice is often not very transparent. With Share of Freehold you can scope an agent contract exactly as you choose - online accounting and read only access for all. (in which case the agent will decide when to key them strategically). If you can find a provider to take it on those terms at a price you like. With normal freehold/leasehold. You are not the agent's customer so they can be seriously concerned about your worries about transparency and smile, take it away and do nothing and send a different smiler next time to look surprised at the same complaint.

A "standard" minimum for each site they do - agent fee floor may seem high as a % of total with 2 blocks of 9. Because it is. With n small. And……nothing.

There are fewer contracts to do without lifts. But it's not linear to number of flats. There is a floor to have a set of things - budgets, contracts, inspections, financial processes etc. which makes sense to them as a business. Higher for corporate bigger actors who do a more professional job. Lower for high street multi purpose property agents - who often do a cheaper but sometimes ramshackle job. Residents are often divided on which they want. Some with a business background hate the cheap unprofessional agent who doesn't do financials properly - receipts in a box - excel at year end. Others hate the higher fee of the "proper one" with actual accounts. Sometimes you get what you pay for. And sometimes you don't. At the moment you don't get to choose anyway - freeholder does.

If you never get sight of budget / spending below the total. Then that's the first thing for residents to push for as a group at annual budget. Start raising the temperature.

But inevitably the man co fee will be a hefty chunk. Family pay >10k for an agent but divided over more people and with more blocks and more stuff than OP (so more contracts to manage and projects).

It would not be particularly surprising if the agent was pocketing 1/4 or 1/3 even to 9k or so (£500 each). Less would be good. Much more would be a reason to be thinking about alternative arrangements. If it's down at £300 per flat or so - then you are doing well.

Consider with office, and business loads - how much of a person 9k buys over the year all inclusive. Not much is it. And you will see why it isn't going to be 2k. Ever. A lot of people are in the mindset of evil freeholder doesn't care and hires expensive agent - so we must replace them. And then they find the market price based on people and office costs just as disagreeable or worse when they get quotes for a new agent themselves with RTM or SOF.

Running your own show without an agent - is a fine approach until it isn't. Because you aren't paying anyone. Unpaid volunteers. The clue is in the title. This is more suitable for a house split into two maisonettes than for two blocks of 9. Volunteers to "direct an agent and run an annual meeting are not easy to find. Volunteers unpaid to do all the legal obligations contracts and works are harder still. And inconveniently they leave or die with no handoff and you are in a mess.

Honestly it sounds like you are broadly in the "lucky" group of leasehold flat owners. Well maintained exterior. Not many expensive things to worry about in future