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Original poster

Leasehold house - should we?

39 replies

Barkyboots · 02/10/2020 13:10

Our house is under offer, and we have had an offer accepted on a house that we both feel would be great for us... but it’s leasehold. We’ve never owned a leasehold property before, and everything I’m reading about them is pretty negative. It’s only five years old, an end of terrace townhouse. It’s leasehold because the terrace of six houses has underground parking, shared with some of the flats on the site. All the other houses on the site are freehold, because their parking is specified spaces on the street. Would it be a bad decision to go for this house? We are both a few years away from retirement and love the location and style of the house... but I’m really worried about the risk of escalating service-type charges, or being responsible for a share of some unexpected huge expense in the future, as we’d struggle to cope with that once retired. Current owners have this as their second home so I don’t think they’ve been too concerned about costs. The house has also been on the market for a year and three previous sales have fallen through which makes me wonder...
Anyone with law/conveyancing/specialist leasehold knowledge who could advise me on what are the key things to ask/look out for, before we make the decision to go for it or back out? Any positive stories from any of you about buying modern leasehold properties?! Thanks in advance.

OP posts:

RedToothBrush · 02/10/2020 19:23

@Barkyboots

Thanks everyone for replies so far, really useful. The lease is the remainder of 999 years so that seems fine. None of the various service charges (we’ve seen the three bills for 2019 for bins, parking and estate services) seem too extortionate in themselves, but they currently add up to about £1800/year. Ground rent is currently £475/yr. But you’re right, I don’t know anything about ‘schedules’. Do we need to start incurring solicitor’s costs to find all this out, or can we just ask the management company directly? How can I find out about possibly buying the freehold? Thanks again.

Im willing to bet with ground rent as high as that its inflation index related. So whilst its that now, you need to have a fair idea of how much it could increase by annually.

And that's why i wouldn't touch it with a barge pole. Red flags all over the place on this one.

GoGoGone · 02/10/2020 19:24

No no no.

Keep looking

CatAndHisKit · 02/10/2020 21:27

So is the advice against it only relevant for modern estates?

I'm curious as I've asked about leasehold houses in period terraces
which are common in Sheffield, and all the locals who replied said it was no isue at all - ground rents are tiny though (20 pounds a year!) and no service charges as I understood.

RedMarauder · 02/10/2020 21:36

So is the advice against it only relevant for modern estates?

Yep.

With some older properties, the freeholder often has given up collecting the ground rent as it isn't economical to do so. There is no money in it for them if the ground rent doesn't increase regularly, they aren't collecting service charges and aren't charging the leaseholders when they ask for permission for every single thing they can think of.

clover83 · 02/10/2020 21:39

I'm a managing agent - I wouldn't touch it with a bargepole.

Original poster

Barkyboots · 02/10/2020 21:57

Oh heck... pretty much nothing positive from any of you then? What about buying the freehold if that were possible? Would that get round all these negatives? If not, I think we’re going to have to let it go. Such a gorgeous house though and DH and I both love it 😥

OP posts:

Nikhedonia · 02/10/2020 22:03

I really feel for the people who have bought these houses. It's going to be such a challenge to sell them in future.

friendlycat · 02/10/2020 22:58

But they won’t sell you the freehold so you will just be wasting money instructing your solicitor to enquire. A leasehold house with those fees is a big fat no.
There was a house local to me with similar leasehold status and I noticed it took nearly 2.5 years to sell. I feel sorry for the poor soul who bought it.
Look up the news issues on these houses. It should be illegal frankly.

SodaPerson · 03/10/2020 00:18

@pilates

I would want to know why three previous transactions had fallen through first off. Is there ground rent payable? If so, work out the cost of escalating rents over the term. I personally would avoid leasehold if at all possible.

I would strongly recomend you listen to what everyone has said here.

Leaseholds generally are to be avoided if possible...but one with ground rent this high is not worth anything...you'll never be able to sell it to a discerning buyer

CatAndHisKit · 03/10/2020 00:43

thanks, RedMarauder - does this mean that you wouldn;t need to ask freeholder's permission for any work, as they are not bothered as they don't charge?

Original poster

Barkyboots · 03/10/2020 02:13

Thanks everyone, I really appreciate all your thoughts, and the detailed replies from those of you who work in law, conveyancing, property management and so on. All the things you’re saying do ring alarm bells... and I don’t want to have all this worry as we head for retirement - just want a quiet life!

OP posts:

RedMarauder · 03/10/2020 11:43

@CatAndHisKit not necessarily. There may be restricted covenants in the lease preventing you from doing any extensions at all or stating that you have to ask but they won't charge you for it. I looked at a leasehold property (maisonette) where I wanted to do an extension if I brought it and even though the freeholder didn't charge for permission or collect ground rent, I would have to get their written permission. If you don't then you would have issues selling it on or they could sell/pass the freehold to someone else who isn't so hands-off.

Also next time it is worth starting your own thread as there is a different reason why houses/estates built this century are leasehold (e.g money) from why they were in the past (e.g. houses for workers in a particular industry, land owned by a peer), and the posts may confuse people.

Cavagirl · 03/10/2020 11:46

Onwards & upwards @Barkyboots - there will be another lovely house out there for you This sounds like definitely one for the head not the heart though!x

RedMarauder · 03/10/2020 11:50

@Barkyboots

I went to a meeting to talk to my MP and some councillors in my area. A couple of the people who turned up owned leasehold houses and were retired. They couldn't sell the houses due to the increasing ground rent and were asking my MP to support the campaign AnythingConsidered mentioned. Their houses had been on the market for 2 years at that time. There as there are plenty of flats in the area which are leasehold including some that are listed blocks, and others that are much more expensive than their houses which have sold in that time.

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