What would you do? Leasehold

[Amerimoon]

We have to make a decision and I’m just wondering if others have bought leasehold properties and what their experience of them is? This is not a very old/ new build property - just a bog standard 1960s three bed semi.

Context: we live in a small, very desirable school catchment area where houses don’t seem to come up that often! When we bought our current house, there really wasn’t any other option in this area and although it’s a really beautiful house (tiny Victorian town house) it’s also small and there’s no drive which isn’t ideal. One of our children is in the school now, one more to go so we really don’t want to move areas. A couple of months ago, a dull but practical semi came up for sale just round the corner and we put in the highest bid for it - we were very pleased! We asked straight away if it was Freehold and we’re assured it was. We’d like to do it up over time but it offers us more space and the right area. Ours had an offer within days too from a lovely couple hoping to move ASAP. They have a child applying for school (deadline mid January) and really wan our house. They offered a low amount, not the asking price but the bare minimum we’d need to move to other house so we just agreed for the speed! We knew everyone was up for a quick move.

No we’ve just had the searches back and they’re showing that the house is in fact Leasehold - we’re really frustrated that we were lied to. The vendor says the freehold is owned by a lady who owns the whole street and won’t sell, she’s apparently very stubborn on the issue. They’ve offered to lower to price by 10k if we continue and we all complete at Christmas. It’s a 500k house so as a percentage isn’t really a big drop, not that we were hoping for a drop at all really, we’d rather pay the full price and have a freehold tenure.

We are awaiting a copy of the lease to read but really put off it now. Do not want to let our buyers down at all and there’s nothing in the catchment to even rent, bar a few very very tiny flats we couldn’t make work.

Can anyone tell me their experiences of leaseholds? We are minded to pull out at this stage and really don’t want to.

What's the problem? You have a Right to Buy, once certain conditions are met - see here
Speak to your Solicitor. See if someone can estimate the cost of buying the freehold and knock that (plus a bit for fees and general inconvenience) off the purchase price.

@senua Thank you very much for that link!!!

@semua do you know anything about how the cost is governed? Because that link describes going to a tribunal which sounds very costly. I bet that’s a nightmare.

@timeforanewstart sounds like your Gran was very poorly advised when she bought her flat.

this is reason to be wary of leasehold but not a reason to totally exclude them from your search.

I have to confess when I was looking in central london I got totally and utterly sick of looking at flats that needed a lease extensions on leases that had been allowed to go below 80 years which were owned by tossers who couldn't see why their flat (needing an expensive 60K lease extension) might be worth 60K less than the one next door that had already had the lease extension done.

In the end I just gave up looking in two particular blocks as they were full of flats bought in the 1980s on 99 year leases that hadn't had the lease extensions done in time.

@Amerimoon

Thanks for all the advice! We are in the NW and I know it’s more common around these parts but we’re still very wary of it. The lies have annoyed us too, we feel tricked. The lease is for 900+ years I believe and only £10/ year. We’re worried because we don’t want to be subject to someone else’s permission if we want to extend in the future and why won’t the freeholder sell if they’re not benefitting in any way other than£10/ year?! They must be charging for permissions or something. Plus to be honest I just really don’t like the idea of it and suspect others will feel the same way in which case it could be a pain to sell on. Why else would he lie about it to begin with?

Oh FGS that sort of lease is very common in the NW (and other areas) and perfectly fine. Your solicitor will obviously check the lease but the freeholder has no right to refuse extension permission.

Why would you want the bother of buying a 900 year lease?!

@titchy perfectly fine to some people, not to others.

@titchy because we don’t want a leasehold property so the only way to achieve that would be to buy the lease

But why?

I can understand if a flat with communal parts, or a development with restrictions and the developer as freeholder, but what exactly are you concerned about with a very small ground rent type leasehold?

do you know anything about how the cost is governed?
The price of the freehold usually goes in line with a formula, although it is a matter of negotiation. I don't know about the legal costs (eg the Tribunal). I would hope that your Solicitor can advise.

Are you using a proper Solicitor and not some cheap conveyancing firm? It's complicated times like these that you want to make sure that your legal team know what they are talking about and are covered by an ombudsman system and Professional Indemnity insurance.

@senua thanks yes we have a proper solicitor, will discuss with them tomorrow. Thank you for your help!

@titchy I’ve already explained in my post above

We are in a northern city where it genuinely doesn't affect the value if a house has a long Leasehold or is Freehold, maybe 5k or something small, but not a significant difference.

We offered on our house without being sure which it was, then the Agent told us it was Leasehold, then when searches came back it was actually Freehold!

Leases are 900 years, ground rents are £10 a year and can't be increased.

A friend specifically wanted a Freehold house and found that the Agents genuinely didn't know, as to most local buyers it didn't matter. So it may be this is a genuine error on their part.

Important to check the terms of the lease and get advice from a local solicitor if having a difficult freeholder will cause any difficulty for you. So that may delay things a bit. But I wouldn't automatically pull out.

You haven't said why though, other than they'd charge for permission to extend - which would be very unusual in the sort of setup here. So again - why. What are you concerned about?

@titchy I also said it may be difficult to sell on because others will feel the same way I do

So again - why. What are you concerned about?
I understand the OP. A Englishwoman's home is her castle and all that.
This case is nothing like the daylight-robbery modern leases but it's still nice to be in charge of your own property and beholden to no-one.

OP one of our houses did have a clause in that said we needed the freeholders permission to extend. wrote to them with the plans, were charged £150 I think.

As I said above people often don't understand the difference between freehold, long leasehold and new leasehold and because leasehold in the NW is usual, long leasehold etc it makes very little difference and the seller might have just assumed it was freehold (knowing that he didn't have a leasehold (new leasehold) that's been all over the news recently) so it could be a genuine mistake.

@titchy

But why?

I can understand if a flat with communal parts, or a development with restrictions and the developer as freeholder, but what exactly are you concerned about with a very small ground rent type leasehold?

@titchy

I don't know about the OP, but I would absolutely not buy a typical house if it were leasehold.

It don't want anyone else to have any control whatsoever over my property (with the exception of general planning / conservation areas etc).

It makes your property niche and restricts onward sale.

I don't know why you are so pedantic about it - if it's not common for the type or area, then of course it's a negative.

@MyGazeboisLeaking

But it’s clear from several posts here that it is common in the NW, isn’t niche & isn't a restriction on onward sale.

999 year leases are effectively freehold. The only possible drawback to the house in OP is the allegedly peculiar freehold owner

It seems to be common around here for older terraces and new builds.i don’t think it’s common for a 1960s three bed semi!

This is a bit of a puzzler though.
If they didn’t know it’s leasehold, how do they know about the freeholder?

@GiantKitten how is it effectively freehold? It isn’t freehold at all. It has a long lease, possibly covenants - no idea yet, and is beholden to another person. It isn’t a freehold property however you look at it

I don't know why you are so pedantic about it - if it's not common for the type or area, then of course it's a negative.

OP is in the NW where it is common.

@GiantKitten they clearly did know it was leasehold, they lied.

@GiantKitten

999 year leasehold homes AREN'T effectively freehold. The leaseholder DOESN'T Own the land their home is built on.

Unlike the owners of the 3 bed semis in a different street.

So, for example, if the home is on a big plot and builder wants to buy the house / land to put up XYZ - the freeholder gets involved.

If the homeowner wants to completely re-design their home and add an extension etc. The freeholder gets involved.

Just because it's historic or common in an area for landowners to have retained the freehold of land on which houses have been built & sold, does not mean its desirable or even ethical.

It has a long lease, possibly covenants - no idea yet,

Freeholder can have covenants as well you know.