London Leaseholds - what are the rent/fees ?

[Marina]

2uk, something you definitely should worry about if it's applicable is a head lease. These are becoming more common these days as flats shrink to bonsai proportions!

Say a freeholder owns several large flats in a block, and wants to split one into two smaller flats. To save having to re-write all existing leases (which will specify percentages of service charges in terms of the existing number of leases), the easiest way to do that is to create a sub lease for one of the new flats subject to the original lease which is then called the head lease and applies to the other flat.

If you now come along and buy the flat with the head lease, then in taking that on you have technically bought both flats. But you have no beneficial interest in the other one, and are responsible for collecting moneys from the sub-lessee who, in effect, can "hide behind you" in relation to the freeholder.

So if the sub-lessee works in Outer Mongolia for months on end, or is a chronically late payer or in dispute over the service charge that's a big headache for you!

And the chances of getting the sub-lease forfeited, so you can take over the other flat, are next to zero these days.

[Dow Jones]

Leaseholds

I don't think the picture is as bleak - maybe there are exceptions, but on average a lease extension is negotiable and subject to arbitration if necessary. Ground rent again is charged according to the book, leaving so-called 'service charges' the only point to contest. Remember the landlord is usually a person, the management is run by a company- mostly unconnected to him. Any disputes with the company should always be copied to the landlord, so that he's got a record of all corespondence and disputes.

[Ardesco]

Don't forget you also have a right to buy the freehold. I believe you used to have to live there for a minimum of 3 years. It is slightly more complex with a flat where you have to group together with the other leasehold owners and need at least 25% of the flats in the block to be able to buy it. But it is possible.

[Bumfluff]

I don't think the picture is as bleak - maybe there are exceptions, but on average a lease extension is negotiable and subject to arbitration if necessary. Ground rent again is charged according to the book, leaving so-called 'service charges' the only point to contest. Remember the landlord is usually a person, the management is run by a company- mostly unconnected to him. Any disputes with the company should always be copied to the landlord, so that he's got a record of all corespondence and disputes.

Yeah but it all depends on your freeholder and how much of b8stard they are, plus if you disagree with the price of the lease increase it can take years to resolve, even when you use the 'Lease Holder Valuation Tribunaral, the result is not legally binding, you then have to take him to court and pay all his fees.

I ended up taking a loss to get red of my flat, leasehold properties are depreciating assets are a nightmare pain in the ass.

[2uk]

Ok, another question , as I see it, most leaseholds will already be lasting for at least 60 - 70 years ahead. So this means that the property's leasehold was paid for 70 more years by the previous owners. I am assuming this leasehold period will be transferred to me , when I buy the property ?

Why on earth will I be caring about "leasehold extensions" ? After 50 years I will likely be past caring..

[Moscow Mule]

Ok, another question , as I see it, most leaseholds will already be lasting for at least 60 - 70 years ahead. So this means that the property's leasehold is paid for 70 more years by the previous owners. I am assuming this leasehold period will be transferred to me , when I buy the property ?

Why on earth will I be caring about "leasehold extensions" ? After 50 years I will likely be past caring..

If that's your attitude, why not just rent?

[2uk]

If that's your attitude, why not just rent?

Coz , after 40 years I can sell the property or give it to my kids ( ) . I've been working my arse out so hard - let the flippers do some thinking and figure out how to pay for the leasehold extension...


PS.
Can you say "work my arse out" in this meaning ?

[Moscow Mule]

Coz , after 40 years I can sell the property or give it to my kids ( ) . I've been working my arse out so hard - let the flippers do some thinking and figure out how to pay for the leasehold extension...

If you don't re-negotiate what is a 50 year lease now, in 40 years time it will be un-mortgageable and close to worthless.

[OwlHoot]

Don't forget you also have a right to buy the freehold. I believe you used to have to live there for a minimum of 3 years. It is slightly more complex with a flat where you have to group together with the other leasehold owners and need at least 25% of the flats in the block to be able to buy it. But it is possible.

The rules are quite complicated, and in some circs it may not be possible to buy the freehold. For example, you'll have problems if there were less than 20 years remaining on the leases when purchased, or if the freeholder resides in the block, and so in.

[OwlHoot]

If you don't re-negotiate what is a 50 year lease now, in 40 years time it will be un-mortgageable and close to worthless.

Exactly, and if you need to sell it and move on or up, any potential buyer will be thinking the same.