Home 'OWNERSHIP'

[TrixieTrishaw]

Advice from a very old woman. Do not buy any property that comes with ANY fees at all that you have to pay to a third party, save for council tax, after the day of the completion of your purchase. If you do, you will be signing yourself up to be a cash cow year after year and the feels will escalate year after year and there will be very little you can do about it, particularly if the property is sold as 'freehold' with estate fees, rent charge etc. because this sort of property known as fleecehold, because you will be fleeced forever because, you do will not have any access to leasehold law, for what that is worth,at least it is a mechanism for some sort of redress.

What?

Ok

I own a leasehold flat in the SE. The fees havent increased in the 12 years I've owned the place. This is a 3 bed flat. A 1 bed freehold house would be another £50k and a 3 bed freehold house would be an extra £100k for something that needs a heap of modernisation. It's not as simple as saying just buy freehold.

I own a flat in London, I have only been here a year, but access to records shows that the surcharge has increased on average 0.75% per year.

If you choose to buy a property with a high servive charge thats your choice, if you don’t want to pay it don’t buy the property. I’m fairly certain people aren’t forced at gun point to buy property.

Our leasehold is on something like a 999 year contract, with an annual fee of something like £2.50, which hasn't changed since the late 1800s. I'd much rather it was a freehold, but most of this immediate area (which we love) seems to be like ours.

Are you one of the people who signed the most ridiculous leasehold contracts and were actually in news about it? Because I thought that these were overturned as unfair especially because people had to use solicitor recommended by developer

Speaking from the perspective of someone who lives in Scotland, I find the whole concept of ‘leasehold’ ownership completely bizarre. It does seem like an opportunity for people to absolutely gouge you on fees for a property you ostensibly own.

@zscaler i kind of get it in flats, but never understood how is it ok with houses

I think the op is talking about detached and semi detached properties that are usually new or fairly new and built on estates. There was a loophole where a lot of these were leasehold rather than freehold for no good reason other than the fact the leaseholders could make large increases on the ground rent. This meant that a ground rent of say £100 could rise, over a decade, to £20,000. There was also a fad for selling on the leaseholds to 'investors' as a cash cow. There is a lot of info online about it.
There is no good reason for a house standing in its own grounds to be leasehold. This is totally different to a leasehold flat which obviously cannot individually own the ground it stands on, hence the leasehold.

@zscaler I agree we have no freehold/leasehold you here. I am on a new estate and we pay a small charge for landscaping etc but it’s written into the deeds and is capped. My mums council are trying to put the same thing in place on houses built in the 70’s. She had it in her feeds that there are no communal charges so all the residents just send the invoices back with ‘disputed’ written on it. The council are struggling for Money but they spend on ridiculous things.

In Scotland, flats either have provisions for factorial schemes written into the deeds, or they are subject to overarching legislation called the tenement management scheme. These allow for mechanisms to enforce payment for repairs to common areas such as the roof and stairwells (which are usually owned equally or split proportionately to the relative size of the flats) without limiting ownership or giving landlords the opportunity to exert ridiculous fees.

The problem is many people do not understand the implications of buying leasehold or freehold (fleecehold) Over 10 years our Freeholder/managing agent misused circa £300k of our money. The only way we could expose this was a lot of hard work, and legal fees. However, we were reasonably lucky in that I manage to 'round-up' a good number of the leaseholders who contributed to the legal costs which spread the costs per individual.

Flats, can be commonhold which means what would have the the Freeholders bit of the development is shared equally between all the leaseholders. However, the leaseholders have to be prepared to 'manage' the development in line with the lease agreements and leasehold law

Are you referring to a house or a flat?

Ah! but the service charges may not be high when you buy. But you can be sure they will escalate year after year as a way of the Freeholder and or their appointed managing agent to keep increasing their profits

We have a freehold property in a privately build road. We pay £100 a year per household for the gardener to come and look after the walkways and landscaping. It's a covenant in our contract and more than happy to pay as it keeps the place looking lovely

Well I don't know what it was bought under, leasehold, freehold or something in between but a friend of mine who bought her own house was recently told that she wasn't 'allowed' to own a dog while she lived in it.

Surely, her own property - she can do what she likes? It wasn't as though she was proposing to put a pig in the back garden (my property deeds prohibit the keeping of pigs), but a small dog??

Few years ago, I viewed several properties which had been refurbished & ex military. Spent a lot of time & eventually choose a property to buy. It was not until I put in an offer that they finally informed me that there was a monthly " service charge" for the communal grounds, grass cutting, tree management. I walked away immediately

I get it OP - we own a flat and the service charge is extortionate. The only good thing is that it does go down by quite a big margin at times (aswell as up!)
I do worry about this affecting how hard it is to sell when that time comes for us

I live in a 2 bed flat in London. The residents own the freehold. DH is a director of the management company and they just voted not to increase the service charge and to collect monies for some big works we are planning.

If you go for share of freehold/a development where the flat owners own the freehold, a lot of the risk is mitigated. I mean in my area, a freehold house is 800K so double the cost of my 400K flat. If I moved outside my area, I would probably end up in commuter belt, where I would be paying £4K for a season ticket so more than double of my service charges. That is just for me, not even counting DH who also works in London. Oh and the rail fares increase every year unlike my service charge which hasn't changed for the past 5 years.

If I was an old woman on the state pension and with zero disposable income, I may be happy to move out of London to a cheaper area and have no commuting costs. A london flat often translates to a freehold home outside London. However I am 27 so that would be 40 years too early, especially considering that we are all retiring late these days. I recall reading an article about a 60 + lecturer who lived in borehamwood who was complaining about having to pay £250 travelcard every month while his counterparts who lived over the border in London basically got free travel due to the freedom pass.

There may be more wfh opportunities in future that may reduce commuting costs but i think most jobs would still require some form of travelling in 2-3 times a week and hence there would still be some travel costs.

@longearedbat there’s no reason why a flat can’t be freehold, in sone countries they don’t even have a leasehold ownership system, they still manage to have flats. It’s just a convention really.

@Zaphodsoth

@Zaphodsotherhead that’s most likely a restrictive covenants. They’re really common and used to prevent people from doing things that are going to be unpleasant for their neighbours for whatever reason such as building extensions, running certain kinds of businesses from home, or keeping dogs.

Zaphod that's probably a covenant. We're not allowed to run a pub (built on what was CoE land) and my in-laws weren't supposed to brew alcohol at all (SA land).

I should add that as an owner of a flat (instead of a house) that of course we do at least need to pay SOME service charge - what I was really shocked to discover when we moved in was that the other houses on the same street as my flat had to pay service charge too - no way would I accept that if I was living in a house

Thank youCovidicusRex and merryhouse - I knew there was probably a name for it! I just think it's unnecessarily restrictive in a house (a proper house, not flat or maisonette or anything). If owning a dog is so unpleasant for neighbours, then why wouldn't ALL houses have such a covenant?

Maybe it means the house is cheaper? I know my friend recently moved from that place because she lives alone and desperately wanted to get a dog for company! She bought another house where she now has a lovely little dog (and could, presumably, keep a flock of sheep should she choose to do so).