Reply to: Buying a house - Leasehold & Freehold

[TheFaQQer]

I had no choice - becomes unsaleable with a low lease length.

One of the reasons for moving when I did was that the lease was coming down to 60 years or so, the agent was a ****, and there was no chance of buying the lease. Landlord was not interested in extending the lease, but offered to sell the leasehold for the six flats and shops for £450k.

[Fishface]

I have a leashold flat - my understanding is that I own the space within the wall for a specified time - the lease.

The lease specifies the rights an responsibilities of both parties - basically anything that can be moved freely is my business anything else is the landlord's responsibility executed by the appointed managing agent. The pipes running through are not my business but if they bust they have the right to break up my floors to get to them and put it back as it was.

I extended my lease last year from 72 years by 100 years - cost £21k legal costs of both parties included. It was done 'by the act' and therefore 20% cheaper than 'with the act' - the legal route.

It gets calculated by the 'marriage value' which gets the numbers for the extention valuation.

I had no choice - becomes unsaleable with a low lease length.

If you have 16+ flats in the block then a manangemt company is essential.

We looked into buying the 'commonhold' but it was very complicated, expensive and would be a lot of involvement in the management.

The benefit to me is that I come and go as I please no hassle sorting leaks, gardens, painting, roofs etc, etc. and it still a saleable asset.

[d000hg]

New houses are leashold where there are shared sevices (water supply, drains, etc) running under the house or garden. Housebuilders do this to save on the cost of running these via the public roads/pavements.

Don't virtually all houses have pipes and drains running through the gardens though? Do you mean that most new builds are leaseholds these days?

[Spacecadet]

I'm a lease holder.
I'm also in the curious position that when I bought the house, I also bought the lease, effectively make me my own landlord

I think I'll have to investigate bring the freehold/leasehold deeds into alignment before we sell.

Another thing about leaseholds (for landed properties)... quite often the lease holder (usually the council) will be willing to sell the leasehold to the home owner for a nominal fee to cover selling costs.

[PerlOfWisdom]

I looked on wikipedia but was not left feeling much clearer on what exactly a leasehold entails. I thought most UK houses were freeholds i.e. you own the property outright when you buy it... how is a leasehold different, and does it make a big difference in terms of 'real life'?

Thanks.

New houses are leashold where there are shared sevices (water supply, drains, etc) running under the house or garden. Housebuilders do this to save on the cost of running these via the public roads/pavements.

[TheFaQQer]

There is some really good information about leaseholds here.

We used them when we went to LVT.

[SuperZ]

Leaseholds are much better than they used to be, and fair.
It`s been mentioned in this thread that a leaseholder doesn`t have to renew it but I don`t thihnk this is the case anymore, by law they have to extend the lease and it has to be at a fair price. I think but don`t quote me, a leaseholder has to extend the lease at least once or twice, or it may even be a case that they have to continue renewing leases.

On flats they seem to vary bewtween 99 years and 999 and even the shorter ones tend to be renewed to 125 years once they hit around 60 years or less I think.

If the leaseholder cannot be found, the state will grant a new lease on behalf of the leaseholder.

A leaseholder these days cannot decide to not renew a lease if for example they have plans to knock the building down and build a bigger one.

[rootsnall]

I got peed off paying ground rent every year so bought the land a few years ago for about £1k

I've got a 900 year old lease at £2.50 a year, and asked for a price that came out at the best part of £1K. I was too tight to pay it ! Problem is I'm now building an extension and legally will have to ask the landlords permission. I'm expecting him to try it on in terms of what he'll charge to give permission

[EternalOptimist]

I got peed off paying ground rent every year so bought the land a few years ago for about £1k

[TheFaQQer]

My first flat was leasehold - built in the 60s at some stage. Had lots of problems with the scum landlord fleecing us - if one tenant pays up for the shared maintenance etc. then it's deemed that you have all agreed to it. In the end, we took him to the LVT to get a fair rent and maintenance charges agreed - lots of hassle, but worth it in the end. Said I'd never buy leasehold again...

This house is leasehold, with a mere 900 years to go on it. Have never paid the rent yet because no-one knows who the landlord is - it was set at £10 a year in 1897 when it was built, and the family seems to have died out. Even if someone turns up claiming for the back rent, the statute of limitations is 6 years, so we'll have to stump up £60. When we bought it, though, the sellers had to take out an insurance policy just in case someone turns up and claims the house back.

Wouldn't go back to a short-term lease with maintenance charges etc. (which is fairly common for flats). My brother was offered the chance to buy the lease from the landlord on his first house for about £300 or so, since it was more hassle for the landlord to collect the rent than not - so when he came to sell the house, it was freehold since they sold the lease as well.

[pzz76077]

One other small point regarding leasehold properties that has not been mentioned on this thread - you are unlikely to be able to obtain a mortgage of any great %age if the leasehold is much less than about 50 years minimum.

Some lenders will not even consider a mortgage on leasehold property unless you have some other sizable collateral to put up as surety.

PZZ

[d000hg]

Interesting discussion. For reference, what got me thinking about this is a new housing estate (2005) of posh, nice houses. We're renting but the owner has decided to put it on the market; I looked at the estate's past sales and noticed they were all leasehold.
It's a Georgian-style street, terraced or semi-detached mostly - normal houses really. The only thing is the developer had to agree not to screw up the existing conservation area to get permission to build... I wondered if the leasehold could be related to that, or is just a way for the developer to make more money.

[OwlHoot]

There is a further complication.

Freehold = You own the land the building is on.
Leashold = Someone else owns the land that your building is on.
Freehold with rent = You pay rent to the landowner even if you own the land that the property is on. Left over from "Lord of the Manor" and mineral rights.
I pay £3.50 per year to be able to use my land that my house is on. There is no lease because the land is Freehold. Yes it is odd. Now only with old properties. Usually it gets to the point where the holding owner just gives you the ownership to use your own freehold land because the cost of collecting the £3.50 every year from everyone in the locality.

With many of new-build flats now the lease is 80 years and the building only built to last the eighty years - which is a bit off putting. You could actually buy the flat and still be living there when the lease expires.

In general, freehold means you own the land the building is on, and the building.

However, it is possible to own the freehold of a building but not of the land it is on, and in that case you would normally have to pay ground rent to the land freeholder (or have some other obligation, such as upkeep of the local church!) In this situation the land freeholder used to be called the freeholder in chief, for example the Queen, or Charlie boy as the Duke of Cornwall; but as I can't find a single reference to that term in Google it must be pretty archaic or else my memory is at fault.

Technically, nobody in the UK can "own" land. A land freeholder is granted possession in fee, but the owner of all land is the Sovereign in Parliament.

[Moscow Mule]

I wouldn't touch a leasehold property with a bargepole. The service charges are usually a total rip-off and there is virtually nothing you can do. And every five or ten years you will have to pay for capital works (new roof, communal decorations etc.) and then you will get really shafted.

Mostly FUD.

As long as you know what you are getting into (and accounts should be freely available listing what works are due etc) then there is no reason to shy away from a leasehold property.

[Moscow Mule]

You must be joking.

When the lease runs out the landlord can make you bring the property back up to a good condition.

I meant to say the landlord is responsible, and they are for the structure of the building & services etc. They are entitled to charge you a fair maintenance charge, but this must be accounted for and any interest kept for the benefit of the maintenance not the landlord.

Only within the four (or more) which are leased to you are you required to return it to them in a good condition.

This is quite a good explanation of it all (including the newer "commonhold" which is like shared freehold ownership).