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.

It does seem like an opportunity for people to absolutely gouge you on fees for a property you ostensibly own.

If you buy a leasehold you have bought a lease, not a property. The freeholder is still the owner of the property.

I own a flat in a building with a freeholder. I love my home but I wouldn't buy like this again- ground rent charges, paying my freeholder for building insurance, dealing with a buffoon managing agent. My payments aren't that extortionate but I do resent them/the not having a choice or say in some things.

It got me on the ladder though, and I'm v grateful for that! I live in the commuter belt so no real worries about selling it on eventually.

It seems like you didn’t understand the implications of buying a leasehold property tbh

i have a flat i own the lease of.

I also have a share of the freehold company as well (as do all the owners). We pay a management comany to organise the day to day running of things (organise gardeners/major works/do the legal bits)

Can't see how flats would work any other way really?

Colleague just refused to buy new flat conversion (previous factory) - telecoms, heating, electricity, water all controlled through the management company, no choice of changing supplier. Fees for the first year weren't so bad, but there was a clause about how they could be raised at any point after.

I think what OP is saying is beware of service charges, especially on freehold estates with a management charge, as there is very little legislation in place to stop the agents overcharging.

You know nobody has bothered with commonhold OP?

We have a shared ownership flat with an annual rent that can increase by RPI plus a %, plus a service charge that, while steep, is required to be broken down each year showing what was paid for. If we were planning on living here for decades, the rent would gradually go up and up above inflation, but we modelled that when we bought the flat and also only expect to be here for about five years.

I think a fair few people are burnt when they sign up for RPI + 5% increases and don’t realise how quickly that will ratchet up - rent/charges going up by 7-9% per year is a lot for some people. For us it is only about £50 extra each year which we are comfortable with.

You're confused about fleecehold. Our home is on a new estate and has a small management fee, this means the grounds etc are kept to a really high standard. For the past two years the fee has gone down. No strange covenants or permissions needed for anything relating to the house. It's just like the council tax except you actually see something of good quality for a small amount of money. Ours is approx 180 - 200 a year. We prefer it, it's something you should know about when choosing, but not something to worry about.

I agree, I live on a new build estate, the plots were bought be different developers.

One side doesn’t pay any third party, council cut the grass, parish council maintain parks and paths, and the other side of the village the freehold houses have all sorts of extras to pay, maintenance, admin, maintenance fees. It also increases for them every year.

*All are freehold properties

What will affect the value of your flat is the remaining years left in the lease to run. The less the years, the less the value

Unfortunately many people in London cannot afford a house and most flats are leasehold so they have no choice but to pay ground rent, service charges etc if they wish to get on the property ladder. So it's good advice but unreasonable.

The important bit is knowing about it. Many, & I mean many of the new(ish) estates have very onerous 'permission fees' some even if you want to change your carpet. Some are liable for maintaining the sewerage system if there is some sort of 'pumping station' involved, roadworks, and with no warranty that the roads have been built to the correct standard etc.

It's very common in Scotland to have a factor in a flat- I'd not buy without a factor in place, especially on our old tenements.

I pay 40 quid a month which includes buildings insurance which is a requirement for my mortgage- there's also an adult in charge who sorts out things like roof repairs.

Can't see how flats would work any other way really?

It turns into an absolute mess. A friend paid upfront for agreed shared repairs - they never got the contributions back. If it had been factored this would have been taken care of.

We own a leasehold house- 950 years left on the lease, £5 a year. It’s former church land next to the vicarage and the houses share an unadopted road. It couldn’t be less fuss- it’d be arguably more hassle to buy the freehold as then I’d have no say in the unadopted road.

The problem is many people do not understand the implications of buying leasehold or freehold

Not quite sure how much sympathy I should reserve for someone who "doesn't understand" the issues surrounding probably the biggest single purchase in anyones lives. How important does something have to be before it's fair to expect some degree of self-education ?

I can understand people not putting too much effort into researching a mobile phone contract. But buying a house ?

Does any of the £100 per year get set aside for when the road needs repairs. i.e. some sort of sinking/reserve fund

@TrixieTrishaw In our case yes, they have created a contingency fund for things like that.

@ShirleyPhallus I understood perfectly, it was the only "negative" to buying there. I am distinctly underwhelmed by the managing agent though - due to things that have happened since I moved in. I don't mind paying communal costs per se, but I question and query anything I deem too steep and it is a bit annoying!

@MrsToothyBitch not sure why you think that was aimed at you - it was to the OP

Op, why did you buy something where you ought to pay when you obviously don't want to?
Did you have a legal advice when buying?
Did you read the contract?

It’s not like these things are hidden - that’s the point of using a solicitor for conveyancing.
I had a flat for 10 years and my ground rent was £60 a year, and ended up about £65. I checked the previous ten year changes before buying. 🤷🏻‍♀️ There was no maintenance (maisonette so block of 4, any critical maintenance at leaseholder’s risk).

New housing estate around us are being sold like that OP, I agree with you. However they will let you buy the freehold for extra when you purchase the house as a new build. But most people moving to them seem to be stretched and can't afford that bit more. So are stuck with the annual rises. A friend bought one new by us and made sure to pay the extra and own freehold, he do his own front garden he says, and he would not want to pay an extra fee for permission to put a put a conservatory or a shed even in the garden.

@ShirleyPhallus - I wasn't sure, I assumed OP but your comment was under mine, sorry! I'd just written to the aforementioned idiot agents though, think I was feeling a bit precious, sorry.