Reply to: London Leaseholds - what are the rent/fees ?

[tim123]

This freehold - leasehold business is the stuff of fuedal times - the quicker we are in Europe then this bulltulip is abolished.

If you think that this doesn't exist in the rest of Europe, then think again. It does. (Though not in all countries)

tim

[tim123]

Ground rent on a 1920's building 1 bed was 8.59 a quarter with my lease extension has gone up to £232 a year with an instrument to increase it also.

But that's only from the date of expiry of the remaining 67 years. If you have been advised otherwise you have been advised wrongly.

tim

[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.

[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.

[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.

[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]

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]

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..

[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.

[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.

[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.

[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.

[Bumfluff]

First place I bought was a flat lease hold bought it with 80 years on the lease the year the law changed regarding lease extension. I didnt know and socilitor never advised me, below 80 years you have to pay something like 50% of what the property would go up in value to increase the lease. I sold with 76 years on the lease, freehold was a tw*t and even charged me £500 for a licience to to sell the flat, each time a sale fell though and I got another buying it was another £500 for a new licience, even charged me £60 to put new double glazing in.

I would avoid lease holds if at all possible unless you get a massive lease and some gurantees on the service charge increases. I would never buy leasehold again it was a total nightmare.

[NoddY]

Suddenly property doesn't look so hot. Maybe the 'asset' isn't one after all. Enjoy the squeeze.

[2uk]

So that means , a leasehold property's price should also be impacted by the current lease expiration date... anyway , thanks very helpful