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Original poster

Why would anyone buy a leasehold property?

92 replies

Awholelottanosy · 16/03/2016 21:14

First time buyer here! Am looking at flats and houses to buy and although I've seen some nice flats they all seem to be leasehold. Excuse me if I'm being thick but it looks like after the lease has expired you don't actually own your property? Why would anyone buy a flat on this basis when you can buy a house and own it outright?

OP posts:

namechangedtoday15 · 16/03/2016 22:57

Yes it really depends where you are but lots of houses here are leasehold - just the typical situation (roads of 1930s houses). Ours is a 999 year lease from 1939.

EagleRay · 16/03/2016 23:02

I live in a leasehold period townhouse (not as grand as it sounds!). Think it's the remainder of a 999 year lease and I have a really silly amount of annual ground rent to pay (around a quid a year). I always forget to pay and actually can't remember who it gets paid to, but one year I did get a very cross letter in shaky handwriting from someone with a grand address demanding arrears and so had to write a cheque for £3.50 or similar.

There are also covenants on the property - something relating to not being allowed to keep goats in the garden and another one to do with my personal conduct. But what with being pregnant and having a toddler, there's not been many opportunities to behave badly recently...

catbasilio · 16/03/2016 23:08

Ha ha to restriction of goats. Ours prohibits chickens and pigs, and also hanging out laundry in the garden on weekends. Thankfully the latter has been overcome otherwise I wouldn't have bought the house! (I always do laundry on weekends).

Original poster

Awholelottanosy · 16/03/2016 23:09

Ha ha, goats on the property? Not a concern for most people I should think! What about cats...?

OP posts:

Original poster

Awholelottanosy · 16/03/2016 23:11

Also, does it make a difference if you're buying with cash and don't need to get a mortgage? I'm currently selling my parents' old property so don't have to worry about that.

OP posts:

EagleRay · 16/03/2016 23:21

Ironically, one of the things which grabbed me when I viewed the house was the fact that there were goats living on the land directly opposite the house. Then one by one they disappeared and the owner's freezer got fuller

lighteningirl · 17/03/2016 06:54

Not all flats are leasehold I only buy flats with a share of Freehold they are out there just keep looking. The one you are looking at I would expect to pay a lower price if there is only 90 years left on the lease as you won't be able to sell it til you have renewed the lease.

Ask if there are plans in place to renew the lease and the cost as a new lease agreement bearing in mind you probably won t be able to renew for a minimum of two years. Thus could well cost several thousand pounds and you are at the mercy of the freehold company as to the cist, I would walk away from this flat and ask to see share of free home properties or stipulate at least 95 years left on any lease.

WhoTheFuckIsSimon · 17/03/2016 06:58

There was a thread in here recently from someone who had just had a latter from the management company saying the roof was to be replaced and she needed to pay 30k towards the new roof! Be careful.

Original poster

Awholelottanosy · 17/03/2016 07:05

30k, bloody hell! Where would you find that sort of money and what would happen if you couldn't? Scary stories, definitely makes me think better off buying a house. Am so tempted to see that flat though, just to have a look...

OP posts:

vickibee · 17/03/2016 07:12

I work for a company who owns freehold for hundreds of houses south of Sheffield, there are lots of covenants attached and the company makes a lot of money enforcing them, you need to pay hefty fees and seek permission to do building alterations. I would never buy leasehold for a house anyway.

TheCrowFromBelow · 17/03/2016 07:13

As pp has said you will need to renew the lease which you can do once you have owned it for 2 years; if there are more than 81 years left this is fairly straightforward and a few thousand pounds. If there is less than this it requires surveyors and negotiation with the freeholder - it cost us over £30K on flat valued at £240k and was a painful experience.
Mortgage companies are unlikely to lend on a short lease, with 90 years left you need to extend for resale even if you are buying cash. If in doubt download the title register from the land registry website. It costs £3 and will tell you everything you need to know. Also ask to see last 3 years maintenance etc payments.

sleepwhenidie · 17/03/2016 07:16

Lightening girl the share of freehold flats are still leasehold, but in addition to being a leaseholder you own part of the freehold as well. This is good because it means you get some say in the level of service charges, what repairs and maintenance is done and most importantly, you can extend the leases when you want to, for a nominal sum. If you see a 999 year lease on a flat that isn't a new build then it's probably sof, it's known as virtual freehold at that length.

lighteningirl · 17/03/2016 07:19

I know that's why my post says share of freehold

sleepwhenidie · 17/03/2016 07:38

Yes but you said not all flats are leasehold - my point was that share of freehold flats are still leasehold flats

lighteningirl · 17/03/2016 07:42

Leasehold is used to imply no share of free home when a flat us advertised as share of threshold it is understood to mean just that. Leasehold and share of threshold are two different things I would not buy a leasehold flat but I would buy a share of threshold as the implied lease is actually owned by yourself.

lighteningirl · 17/03/2016 07:44

Damon autocorrect

FishWithABicycle · 17/03/2016 07:44

The building dates back to 1750 and is listed - if the roof needs repairs it is going to cost each leaseholder many thousands of pounds. Caution!

lighteningirl · 17/03/2016 07:51

Autocorrect had a field day there

MyLocal · 17/03/2016 07:55

Personally, if you can afford a little house, and it seems there are houses for that price in that town, then I would. I wouldn't touch an apartment and the associated hassle, especially a period property like this.

Good luck, maybe go and see it if only to bring closure!

Itsjustsmalltowntalk · 17/03/2016 07:56

Actually you can have a freehold flat, I bought mine freehold. Very rare, so probably doesn't help the OP, but possible. I own my flat and the freehold of the whole building (house split into two flats).

mashpot · 17/03/2016 08:06

I have bought and lived in 2 flats in London but would only consider share of freehold (and as such, yes we are also leaseholders). I would never buy leasehold because of the lack of control on paying and budgeting for works.

QueenElizardbeth · 17/03/2016 08:13

We have a share of the freehold here, when you buy a property you basically extend the lease at the same time. We extended ours to 125 years. I'd have gone for 999 years as I don't think it costs more. I'm not clear why we didn't, but anyway, 125 is fine, and 90 sounds fine. It's when it gets below about 75 that you have a thing come into play that costs thousands to sort out. ie cheap flat we initially looked at, 140K, but 57 year lease meaning potentially another 50K on top of that.

Europeshoe1 · 17/03/2016 08:16

I don't think you have much of a choice if you buy a flat

Watch out for maintenance charges

A friends went from a reasonable £2000 a year to £14000, YeP FOURTEEN GRAND,

QueenElizardbeth · 17/03/2016 08:19

We could have had the whole freehold but declined as that meant we would be liable for all the external repairs, not just half.

(I think)

sleepwhenidie · 17/03/2016 08:42

No you wouldn't Elizabeth, as a leaseholder, the owner of the other flats would have still been liable for their share of the cost of repairs.

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