FTB and leasehold property advice

[mizu]

I'll try and make this short. Any advice gratefully received. I've been on here for years moaning about buying a house and saving...........

Background info: been saving for a deposit for years, about 7 years and finally been able to buy at the grand old age of 45. Married with 2 DDs. We live in a highly desirable area where property is extremely expensive. Girls go to local school, we have lived in the area a long time and the place we have bought is close to the school. All good as the girls do all kinds of before school and after school clubs at the school. The area is great and my work is local.

The place we have bought is a maisonette and we bought back in February - it is leasehold and has 90 years left on a lease of 125. It is what we can afford. We couldn't afford anything else in this area. It has a garden and parking and is quite quirky which I like.

I have been researching a bit about leaseholds and I am now aware that in a few years time we will have to renew. Trouble is, we don't know how much it will be. Our solicitor says the council will not converse. To renew we have to have been in the property for 2 years.

We have a meeting next week with our solicitor and should be signing the contracts and negociating the moving date but I am now feeling a bit nervous.

I guess I just want someone to say go for it, it will be fine. I know leaseholds can be a PITA but I am sick to the back teeth of renting and saving. Trouble is, if we need to renew a lease it will surely mean more saving?? I was so excited at the prospect of moving but looking into leases etc has put a bit of a dampner on it all.

The leasehold advisory website says it could cost around £3,000 and moneysupermarket say around £8,000. We just do not have that kind of money!

Apologies for length

I have no interest in making money just a place to live.

It cost us £7k to extend a lease on a one bed flat in Reading. It will depend where in the country you are. It is usualky cjeaper to negotiate the price with the LL as you have to pay the survey fees, tribunal fees etc.. even when negotiating a premium you will pay the LL' s legal fees. Hopefully the value of the property will increase and you will possibly be able to remortgàge o afford tk extend. As long as you do it before it drips below 80 yrs

Drops not drips

Thanks for reply. Ours is 2 bed and in Cheltenham. £7K ish could be done I guess if included in a re mortgage.

Have you checked with the local council about renewing the leasehold? I am a leaseholder with local council and they don't charge a fee for renewal. You only pay your own solicitors fee. Why is your solicitor saying they won't converse?

heman

The report says - we have tried to establish the cost of a lease extension at the stage but Cheltenham Borough Council will not converse........

I know they have spent a considerable amount of time trying to get the info. When I asked the solicitor about this, she said she could give me the contact of someone who I would have to pay to help me find out what kind of price I would have to pay!!!!!!

Leasehold are common. You must renewby 80 years as the cost of renewing goes up a lot after that. So you've got 10 years to save.

You can renew at the point of buying the property if the seller is agreeable as they can start the process and hand it over to you.

I'd go ahead with the sale in your situation. It's the dodgy leaseholds on new builds that are too expensive to buy that are concerning. Leaseholds for flats are common and expected.

mizu can look you on the council website and find some info about right to buy/leaseholder info? I know the RTB bit won't apply to you but it might give you some idea? Our local council have info and pfd leaflets available to download.

Thanks antihop, yes it is a 1950s building, rather quaint. Not a new build.

Heman, I will look at the website but surely the solicitor will have worked hard to find out???

Thanks all.

Meeting solicitor tomorrow, been thinking of little else and am now getting quite excited at the prospect of finally buying.

OP, good advice on here re: lease extensions. I’d add that if you are buying a LA owned leasehold property (or indeed any LH property), double check through your solicitor what the property management arrangements are. Specifically you need to check if any section 20 works have been issued or are due which can be costly (big ticket items like exterior painting/roof works etc). I’m sure your solicitor will hand hold through this with you but you will also need to check that the current owner is up to date with their portion of the management fees as the liability transfers with the property. LH properties also require ground rent to be paid annually the amounts of which can change after a defined period (10/20/25 years etc) so it’d be a good idea to see where you are in terms of this payment change (if any, too) the answer to the latter you can find out by using the LR portal and the info will cost you £6 to find out. There should be two title entries against the property address; the freeholders interest and then the assigned lease. Good luck with your purchase!

Before you jump into extending the lease, get to know your neighbours and see if there us an appetite to set up and run a self-managing leaseholding group between you. Depending on the building this might just need to be your upstairs/downstairs neighbours and yourselves, or it might need to be everyone in a row. You are then allowed to choose for yourselves when to get the roofs fixed and how to split the costs and also will have the power to set what the lease extension terms and costs are.

Thank you both, info to take to the solicitor later. I know the ground rent is £10 a year and service charge £328 I think. And think the service charge is due end of June so another cost to consider.

OP - also budget for the cost of the freeholder’s solicitor/manangement company to reply to enquiries regarding the service charge/GR etc for exchange and a completion statement. Costs vary but around £300 per form is about a standard rate. Hope all went well today!

Look at lease-advice.org. A big factor in the price is whether the 'marriage value' is paid which is for leases under 80 years and very variable on the value of the property which is why you will see such different figures as examples. Ours was 16k as we had to pay it but is only expenses without it.

Also, is your solicitor a leasehold expert? The average conveyancer isn't and worthwhile finding someone that is.

The council has to engage and agree to a leasehold extension and enter negotiations. That’s the law. They can’t just charge whatever they fancy, there is a formula taking into account value of property, remaining lease, ground rent. The leasehold advisory service should be able to help.
I hope your solicitor regained their wits and your meeting was fruitful! I extended but after it had fallen below 80 years ( so attracting marriage value and a bigger fee for me). You are right to get going now.

Sorry single I see I have mostly repeated what you already said!

Thank you again all. Yes, leasehold expert apparantly or so our mortgage advisor told us!

Signed contract, should be moving in around 3 weeks.