Leasehold vs freehold

[blackberrypies]

Please bear with my ignorance, I have no one else I can really ask this to tbh as I feel a bit silly not knowing.
I am planning to buy in London. I currently have a freehold property outside of London. Everyone in my small and small minded family told me that I had to buy freehold and god forbid what would happen if I bought got leasehold.

Obviously in London chances of me finding a freehold for my budget (£700k) is minimal.

So, before my family start ranting, what are the real difference and should I stay outside of london to own a freehold vs buying a leasehold flat more central which ideally is what I’d like.

FWIW I don’t understand it all therefore I have no opinion either way.

I had a leasehold flat plus share of the freehold. In our case it was quite straightforward as it was just our first floor flat and the ground floor flat. I arranged insurance annually and we split the cost of that, no other service charges or ground rent which was nice. Any works to the structure of the building would have been split 50:50, luckily we did not have anything in the three years. We did some minor works such as painting fences and the communal hallway ourselves to tidy it up we came to sell, we didn't ask our neighbours to contribute as it was not essential but decorative and mainly for our benefit.
In larger buildings you might have a committee of owners and it could get more complicated.

Share of freehold for a flat is perfectly normal. You can get a mortgage for a share of freehold flat. Normally you have a management group for the owners and decide on contributions to upkeep of communal areas. One flat we owned, all 18 freeholders agreed to new balconies. The flats were sold and purchased in a straightforward way. Basically, leasehold with a long lease and share of freehold are fine. The management charge on leasehold can be very variable. All of this can be ascertained before you buy.

Yes super new build leasehold houses are different but there has been lots of publicity around those - also I didnt think (assumption) that it would apply to the OP looking to buy in London. Don't think there are many Taylor Wimpy/ Barratt type new build estates?

You dont need to live in a commuter town op. Come live in the lovely dulwich. www.rightmove.co.uk/property-for-sale/property-53860572

The only place I would consider owning a leasehold is in a desirable part of London. There isn’t much option, so if you want to live there do it.

I recently bought in London and the leases of flats we were considering we’re all sub 100 - not far below, but around the 95/96 year mark. We took professional advice and did some research and that’s just normal for London it seems within our price range (which is same as yours).

It is gutting to go from freehold house elsewhere to poky London freehold flat - that’s London! Take it as an opportunity to downsize :)

Make sure you have a good lawyer who you trust and ask them to really look through the lease. There can be weird stuff - as someone above said, pet restrictions are a thing.

Alternatively, look further out - zone 3 and 4, freehold is not beyond possibility :)

"...what are the real difference and should I stay outside of london to own a freehold vs buying a leasehold flat more central which ideally is what I’d like."

London is a massive city. If I understand you correctly, you are now living outside of London and hope to move to London preferably central London. But how central is "central"? Piccadilly, King's Cross, Victoria, the West End, Zone 1, etc are all "central". Nobody actually "lives" in these areas, IYSWIM, it's all shops and businesses here where £700K may just about buy you a toilet or a small kitchen, assuming you can get someone to sell you one. I wouldn't want to live here - crowded, expensive, no parking space, no private garden, congested, high air pollution, noisy - gosh, this would easily take 5 years off your natural life, if not 10 or more!

The huge bulk of Londoners (including myself) live further away from the "central" areas and it's great. Of course, the outer zones are cheaper than the inner zones. £700K can buy you a very decent 3-bed freehold house in Zone 4 if you keep searching. I'd never touch a leasehold property again when you don't actually "own" anything - it's always expenditure here and there every other year on stuff that don't actually benefit you personally. Upthread you have some excellent advices re leasehold vs freehold. I've since bought a freehold almost five years ago (Zone 4) with a large garden, private parking, etc and never spent anything substantial though some redecorating needs doing. But I'm taking my own time and nobody hassles me. It's my own private property that I'll pass on to my kids and they to their kids later, etc. That's the beauty of a freehold.

tethersend lovely photos of flat in Hackney/Bethnal Green - but what was the price?

peterenas Leasehold properties can also be passed onto your kids!

A lot of the regs/hassles of leaseholds are just to do with sensible ways to live alongside one another in flats. I'm glad there are rules preventing the people above me from installing noisy floors, and insisting we all chip in to pay for repairs (for instance)!
A well managed, purpose built block with either share of freehold or a leaseholder run management agency, can be absolutely brilliant to live in!

I tend to agree with messy and you can definitely leave leasehold property to children.

I didn’t mean to imply £700,000 was a small sum, op. However it will very much depend on what your view of Central London actually is. That money would get you a decent flat in many zone 2 areas and you can get decent transport links too. However if you are risk averse, you will struggle to find many that are share of freehold in London and it’s not always desirable either as said above.

Peterenas: It might be difficult for your children to all live in it though if they all have children! Is this a zone 4 mansion?

We have a large country house which we will sell and downsize. Then give away or spend the money to avoid inheritance tax!!! Sometimes handing on property is full of tax implications!

I went leasehold - I would do it again but with the benefit of hindsight and looking very, very carefully at the freeholder, where they were based, whether they had a managing agent and what the fees were and how things would work if repairs were needed. What would also be crucial for me is other tenants in the same position in the same building. In my last experience mine was the only leasehold of the three in a house conversion which gave no leverage. I ended up at tribunal to get anything done and paid through the nose for solicitors and new managing agents. You can also only extend a lease once, from memory, so worth checking that too . But mine was an extreme situation and I absolutely loved where I lived and had the best time for 10 years apart from the freeholder issue so I wouldn''t avoid it - but would just be super careful.