leasehold on a new house

[bowsaw]

put an offer on a £300k+ house and it then turns out that on almost completion its a leasehold with a £8 ground rent

is this a deal breaker?

How long is left on the lease?

It would be for me. Why didn't your solicitor point it out before you exchanged contracts?

£8 per what?
How long to go on the lease and who is the freeholder?
You often can't get a mortgage if there's less than 35 years.
But sometimes it's possible to buy the freehold for £[notverymuch]

not exchanged, it was found well after all structure checks etc, the house is over 20 years old and theres 950 left on the lease, but seems odd to have a house where you dont own the and its on, i get it with a flat

Would be a deal breaker for me, and I'd be pissed off if it hadn't been brought to my attention or I'd been mislead up to this point.

I'd take it if it were a reasonable price and then see about buying the freehold when you've been there a while (perhaps get a rough idea of how much that would cost and knock it off the asking price).

its owned by the original development company it seems, 8 per year

Is the house 49 years old (or any other amount that added to the years remaining on the lease adds up to 999)?

Who owns the freehold (ie is it a Duchy of somewhere-or-other)?
How often is the £8 payable (yearly/quarterly/monthly/weekly)?

Is there any provision for it to change?

If there are 950 years left and the house is 20 years old, it's on a virtual freehold, slightly different from an apartment lease.

Freeholds are more valuable to a developer that virtual freeholds, so I am guessing there was something at the planning stage that prevented the developer from carving out the land that the house is constructed on and selling this on, so you may not be able to buy the freehold.

I would go ahead if I was satisfied that the price was comparable to a virtual freehold rather than a full freehold and once I'd been advised properly about any repairing / service charge payment / behaviour obligations.

Can't believe you've got this far without being told, the conveyancer needs a right bollocking.

^ What MrsBertMacklin said!

Have you exchanged? If it's Crown land, you may not be able to buy the freehold, but with 950 years left on the lease, you most likely have a virtual freehold anyway - I would check and see whether you can negotiate to purchase it, but as she says, make sure you know exactly what your obligations are under the lease before you complete.....

if its causing concern with use, then the next buyer will be same, might be best to leave it and find a different bristol house

It wouldn't bother me and there are ways of buying the freehold that don't cost the earth. Get advice from your solicitor: that's what you pay them for.

Your solicitor should be advising what the concerns are (if any). They could be:

1. Freeholders ability to increase the ground rent and/or charge additional amounts (if they are responsible for maintenance of e.g.: exterior of property or grounds that the property sits in
2. Other 'controls' the freeholder may have - your lease may contain additional restrictions to that which would usually be in a freehold title so you may not be able to do certain things without freeholders permission (e.g.: change the colour of the outside, build a shed in your garden, run a business, keep animals)

950 years is as good as freehold (value starts to diminish with less than 80 years left on a lease) UNLESS the lease is restrictive or abnormal in a way that would discourage future purchasers.

I personally wouldn't be overly concerned if no issues under 1 and 2 above could be found. Whilst it's unusual it's not unheard of though usually done for good reason - your solicitor should ask why.

oh. one more thing - even though it will be full of legalese I would encourage you to read the lease - even if it means you ask the solicitor what certain parts of it mean. It's a good way to get your head around what belongs to you and get your solicitor advising not just paper-pushing.

thanks for the info

It sounds to me as if the freeholding company has set this up quite deliberately and will not be very likely to sell the freehold. Maybe they want to retain some measure of control over the development and are charging a nominal rent just to retain enough rights for whatever their purpose might be.

New persimmon estates are all leasehold on 999, with potential to buy the lease later. I think it's becoming more common and hasn't put me off.