Leasehold

thebullsback

HI, we viewed a semi detached bungalow last week and have decided its The One .

The only snag is its Leasehold with 934 years left on lease with a ground rent of £9 p.a.

Are there any relevant questions to ask the agent to put our minds at ease before putting an offer in or is leasehold best avoided ?

user1977

Unless there's something unusual about it, it's nearasdamnit freehold, and probably less problematic than a modern freehold with 30 pages of smallprint attached.

eddddy

There might (or might not) be covenants in the lease saying things like:

• You need consent to make alterations
• You need consent to keep pets
• You need consent to sublet

If that kind of thing is important to the deal, you can ask the seller before making an offer - but sometimes people don't really know the details of their own leases, so you might not get a helpful answer.

If your offer is accepted, and you proceed, your solicitor can give you definitive answers about that kind of stuff.

But if you buy the leasehold bungalow, the law allows you to compulsorily purchase the freehold as well.

The cost of the freehold should be less than £200 - but unfortunately, the legal fees etc might be £2k to £4k.

If you buy the freehold, any covenants about alterations, pets, subletting etc usually become irrelevant.

HouseHuntingAmy

Also house-hunting at the moment and leasehold houses come up round here more than you'd expect. With 934 years and £9 a year this is about as benign as leasehold gets - the thing I'd actually check is less the lease and more the freeholder: your solicitor will want to know who they are and whether they respond, because an absent freeholder can slow a sale or a remortgage down the line.

Two questions worth the agent's time: is the £9 ground rent FIXED for the whole term (a doubling clause hidden in an old lease is the classic trap, though at £9 even doubling is painless), and are there any estate or service charges on top for shared areas? If its just the £9 and the covenants eddddy mentioned, most buyers would take that over a modern freehold estate charge.

Longer term, if you buy it and stay, you can usually buy the freehold for a few hundred pounds plus fees once you've owned it two years - plenty of people do it just to stop the question ever coming up again when they sell.

eddddy

HouseHuntingAmy said

Longer term, if you buy it and stay, you can usually buy the freehold for a few hundred pounds plus fees once you've owned it two years - plenty of people do it just to stop the question ever coming up again when they sell.

Just to clarify - you no longer have to wait 2 years to start the statutory process to buy the freehold, you can start the process immediately after buying the leasehold.

(The Leasehold and Freehold Reform Act 2024 changed this from 1st Jan 2025.)

But an absent freeholder would probably make the process more complex and slower - and the legal fees higher.

thebullsback

Many thanks for all your thoughts and information you have all been very helpful. The property in question has now under offer to someone other than us so we will continue our search but the knowledge gained will come in handy if similar situation arises .