Can someone explain to me about leasehold and freehold properties??

(7 Posts)
MrsMargoLeadbetter Fri 21-Jun-13 11:14:00

As others have said selling on with a short(ish) lease is potentially where the issue is. Many lenders are cautious.

I'd check with your lender (if you need a mortgage). I would also assume your solicitor will look into the issue for you:

- What are the options for extending the leasehold?
- What is the likely cost?
- What repair/upkeep costs have beem past on by the freeholder in the last few years? What hasn't been done that might be required? Eg new roof etc. It depends on what your ground rent covers in terms of upkeep.

When I owned a flat I think the cost of renewal/ground rent renewal were protected in some way by a calculation based on x times the ground rent. So the freeholder cannot just demand £00000 etc.

Your solicitor not Estate Agent is the key to understanding fully the cost and set up of the leasehold in this case.

ISeeSmallPeople Fri 21-Jun-13 11:13:59
lalalonglegs Fri 21-Jun-13 10:56:29

Under 80 years is an issue with most lenders because, until you reach 80 years, you have the right to have the lease extended for free by - I think - 89 years (paying only the freeholder's costs). If it is less than 80 years, then you have to start paying a premium to have it extended.

In order to have the lease extended you have to have owned the property for two years - although you do not necessarily have to have lived there - and, of course, some freeholders will extend without your having to wait that long.

The essential thing to remember when you buy a leasehold property is that you do not own the property, you only have the right to live there for xx years. You have to pay ground rent to the freeholder (not generally very much) but you will also have to pay the freeholder for all repairs, insurance etc that they see fit and this is where disputes arise: some freeholders see the maintenance side of owninig a building as a cash cow and, although there is legislation in place to prevent the worst excesses, some still try it on. It is always worth getting records of the last few years of service charges to see what level they are (your solicitor will request these) and asking if there are any major works proposed.

noisytoys Fri 21-Jun-13 10:51:29

80 years is where a lease becomes a problem. Over that and you should be fine. Watch out for high service charges / maintenance fees, but other than that a leasehold property should be cheaper than a freehold property for the size significantly.

LIZS Fri 21-Jun-13 08:14:51

I think under 70 years is where you get issues . Leasehold may mean you are not fully liable for repairs etc , Depends on the wording of the contract but it may limit what you can do with the property in terms of renting out or working from home, maintenance and developing. There are guidelines about the cost and rights to buy freehold or extend leases.

inneedofrain Fri 21-Jun-13 08:09:01

We'll I'm not an expert

But it is not always possible to extend a lease
Cost of extending one is highly variable
I wouldn't touch a lease hold but have friends that prefer them it's down to preference
Most mortgage companies won't lend on leasehold with under 30 remaining
In some towns you can only buy leasehold
For specifics I'd talk to your solicitor

inadreamworld Fri 21-Jun-13 08:02:58

We are looking at a property which has 97 years of the lease remaining. The agent says this is a good length as the place only started off with a 125 year lease anyway.

I am confused about leases in general - how much does it cost to extend a lease? If we came to sell the property in a couple of years would it put people off buying? Are there any advantages to buying a leasehold property or is freehold/share of freehold always better?

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