Has your house lease expired - or is it due to soon?- elderly man forced to rent their house that they've paid their mortgage off

[cakeorwine]

‘I was told to pay £212,000’: property owners face huge bills when lease is due to expire | Leasehold | The Guardian

An elderly man bought a house with a lease. Paid their mortgage off but then the lease expired.

The company that owns the lease then said they should pay to rent on his property (albeit below the market rate)

Someone else tried to extend their lease which had 11 years left on it.

Because the property had increased in value, the cost of extending it would be £210,000. At the age of 86.

I have a lease and I know that it there is a cut off point of 80 years left - when the marriage value kicks in which increases the cost of extending the lease.

There is talk of a bill to look at Leases - it can't come soon enough.

"Lawyers for the freeholders who own the freehold to Goddard’s property did not respond to requests for comment."

And if you have a property with a lease below 80 years, it can become much harder for someone to get a mortgage on if you plan to sell it.

Easy if you are aware.

But there will be some people who aren't aware - as in the article.

What did his solicitor advise when he bought the property?

This is crazy. I’m in Ireland and it just doesn’t happen here. Apart from apartments which are always leasehold houses here in Ireland are always freehold. It’s actually illegal to charge ground rent here all houses have been freehold since the 70s.

How can you not be aware, you have a solicitor?

He will have got the property extremely cheaply, perhaps it was a gamble for him, for some it can work out financially convenient, he now has rent to pay below market rate, he can claim HB on what is essentially his home, I dont think anyone can move him from there can they?

We renewed the lease on our first flat (as part of collectively buying the freehold). It was a complete pain in the arse, because the freeholder company were a bunch of scamming crooks. We already knew that from having dealt with them for a few years though! Worth it in the end as we definitely made the money back when we sold but really, it shouldn’t have to be like this in the first place.

The system really does need reform, I hope it’s coming.

"The new act bans freeholders from applying a marriage value, and so when it is introduced it should significantly reduce the cost of a lease extension. The act also provides leaseholders of flats or maisonettes with the right to extend their leases for an additional term of 990 years with just a peppercorn or no ground rent."

I think I have about 90 years left on my lease. Below 80 and things get more expensive,

I am waiting for this bill to come into law to make any lease extension as cheap as possible.

Some people might not be able to afford to extend their lease.

But if DS wants this house, then I am going to have to extend the lease at some point.

But the point is - I am aware of the issues

When I got my flat, it had a decent number of years on the lease

However, in say 30 - 40 years time, there would be much fewer years. I would still be alive (hopefully) and then that's when these issues can kick in.

I once knew a woman who bought leaseholds all over the UK - often whole streets at a time - at auctions. She said they were good and easy investments, and yes, she was odious.

Why do houses need to be leasehold anyway? This is outdated law that should be changed.

Leasehold should be banned.

When they bought, the couple had recently come to the UK from Jamaica and were not familiar with the way the leasehold system worked. They did not realise that there was a lease on their home that they needed to extend before it expired. There were 34 years left at that point and as the clock ticked down they were oblivious until he received a letter warning him that his lease was due to expire soon.

Thomas and his wife bought their home in north-west London in 1974. He assumed that once he had finished paying off the mortgage, the home belonged to him and his family. But instead, since 2008 he has been paying £1,040 a month to live in the same house – a big strain on the 86-year-old’s budget – and he has nothing to leave his children.

Someone should have told him. But you can see how it can cause issues

Leasehold should indeed be banned.

No surprise that the system is only in place in England and Wales. It is a relic of the feudal system and just pure greed...

Reform has been promised for years but kicked in the grass because so many Tories are landlords/freeholders. Labour needs to deal with this urgently.

Really?

I am fully aware of when my lease expires - it had 125 years on it when it was originally sold to the previous owners .

Did I know about "marriage value"?
Did I know how to extend a lease?

No - and I bet many people who have leaseholds don't.

But I researched it and I know the costs of extending it and when the marriage value kicks in.

In about 8 years.

I know this because I came across some articles.

But my lease said 125 years from 1989 - which is a long way in the future.

This isn't news and anyone who bought a leasehold property without understanding the deal had a crap solicitor.

Lease means rent. When you buy a leasehold property with an 80 year lease you are paying the rental cost upfront for 80 years. If you borrow a 30 year mortgage and pay it off you'll get 50 years rent-free.

The 86 year old man in the news article is in a better financial position than an 86 year old who rented on shorthold leases their whole life and will have paid much lower rent due to the leasehold arrangement. It's not a bad deal.

Properties with e.g. only 50 years left on the lease are a lot cheapet than ones with 199 years on the lease so sometimes they are a lot more affordable for someone who isn't expecting to live for as much as 50 years longer.

The Act mentions is going to make some changes in favour of future leaseholders but won't magically deprive the freeholders of the fact that it is still their property, not the leaseholders.

Leasehold should indeed be banned, but his solicitor would definitely have been clear about what it meant when he bought. I bought my first house in 1980, freehold, but we looked at leasehold properties and the estate agents and our conveyancers made the difference very clear. It was also clearly stated in the terms of sale and from the price differential.

"The new act bans freeholders from applying a marriage value, and so when it is introduced it should significantly reduce the cost of a lease extension. The act also provides leaseholders of flats or maisonettes with the right to extend their leases for an additional term of 990 years with just a peppercorn or no ground rent."

I hope it's retrospective - and not just to new leases

Its not like they didn’t speak English so they’d have understood all paperwork and what their solicitors would have gone over, and the solicitor would have gone over this very clearly. They chose to ignore it.

There are some very unkind smart alecks this morning who don't appreciate that conveyancing is an arcane science for many especially those who bought property in a different, more innocent era. It probably wasn't so much that their solicitor didn't explain properly, it would have been more a lack of proper understanding of the ramifications further down the line.

Leaseholding needs to be banned, there are some thoroughly unpleasant leaseholders who are no better than loan sharks.