Would you buy leasehold?

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I am thinking of buying a flat with a long leasehold (900 years, according to the estate agent). But I have been reading around on the web and have seen some scary statistics about how 60% of buyers regret/would never buy leasehold again; and testimonies from people who can't sell, the owner of the building won't do building maintenance, things like this.

I am currently renting and the mortgage would be about the same as the rent - would you do it?

In an ideal world would I actively choose a leasehold if money was no object - probably not.

But flats can be great and in some areas better than the equivalent price house in terms of size and usually parking. Therefore, I’ve compromised for the larger square footage and have a leasehold. Also, if it’s buys a flat or nothing, buying is usually better.

Just check the lease carefully and it should be fine - millions of people live in flats with no issues.

Yes, buying is better than renting.

You will need a basic survey (usually called a Homebuyers Report) in order to get your mortgage, if you need one. The mortgage co usually send one. (But you pay).

Me and my partner ended up pulling out of buying a leasehold flat we had several problems and it dragged on and on.. so from my own experience I'd say don't touch one unless you have no other choice to get on the housing market. We have ended up buying a house at near the same price but needs doing up all new flooring boiler kitchen bathroom doors etc but will do this gradually its a small terraced house , would this be an option maybe for yourself ? There's alot of stipulations from the management company about what you can and can't do , we read into the reviews for them they were horrendous i.e. not having work completed, taking over 6 weeks to respond to emails with issues and charging for literally everything possible. There has been new legislation put in also because of the Greenwell tower incident so you now have to have a form called an EWS1 form to prove it doesn't have cladding ( if the building is over a certain height/floors) if under but with cladding you need the form still. It can take months to get one. The second issue we had was our lender ( a well known one) wanted a deed of variation for the lease as they wanted several things adding regarding the ground rent. The management company's will have written how much the rent increases over what period of time ours for example was a 124 year lease ground rent 150 increased every 21 years (worked out i think by the increase in all the propertys from first sell to current value?) The management company caused a fuss about the deed of variation and our solicitor stated it would be an issue with other lenders not just ours. The lenders want to make sure the management company don't rack the prices up to unaffordable levels so wanted a cap of 1000 on ours. I also read into the rent and found the property can be repossed if you fail to pay the rent and the lender has no leg to stand on. This explains it better...
www.ogrstockdenton.com/nasty-ground-rent-stings-long-leases/

There has been issues with rent increases getting higher and higher so the government are putting a stamp on it but this is new propertys only.

The maintance charges can also increase drastically ive read others who can't afford it anymore..

Please read into things before you consider these are problems we didn't know existed and wish we knew before we got involved in a solicitor and wasting money. Our mortgage would of needed an extension to carry on any further this was after 6 months ... and still to fro questions of the deed of variation it was a headache.

Years ago my husband had a flat in London (leasehold) but bought the freehold later, so that could be worth a thought?

So many of the above comments don’t really apply to standard leasehold flats. You have to get the details for what you are buying, not some other property. 900 years is a very long lease. The ground rent will probably be negligible. It’s not over 6 stories high but if it’s the building in the link, you can see some of it isn’t in great condition externally. Of course you need a survey and I would get a full one. The man co is responsible for the roof an that includes you! Everything other element of maintenance will be charged for too so you need to know what might arise.

A man co with 1 Director is useless. Resignations happen when people sell. This man co needs more directors to work effectively. How can decisions be made with 1 Director?

With 1 director you need to find out why. Is it that none of the other leaseholders want to be directors or that the managing agent preferred one director as they were able to "manage" them We have a rental flat where that had happened, and it took some sorting out. It's most likely that the resignations are due to people selling.
The thing you really need to look at is how well the building is maintained. I almost think £350 for both service charge and ground rent is low and suggests minimal maintenance and no fund for renewals.

No

Urgh. Not if I had any other option, it's just a ball ache.

However, if that's the only way you can get out of renting & into your own property then it can be worth the hassle.

But definitely check out cladding, cost of buildings insurance, provision for increasing rent/maintenance etc. What you/they are liable for & what rules there are etc.

Thanks again, everyone.
The one-man company has nothing to do with the residents, I think, it's a management company with a registered address hundreds of miles away, and the 4 resignations they had lately are from people with the same surname (thank heavens for Companys House!). The person who is the director now has/has had 10 other appointments with similar companies. So it doesn't look that good.

I have just cancelled the viewing - I like the flat itself (from the pics, the location, etc.), but there are so many red flags you have pointed out, and so many things to deal with that I think I'll stay off buying a flat for now.

Thanks again, everyone, you've all been huge help!

OP - please don't be put off in general though.

I wouldn't be put off wrt that flat either, in the absence of any actual evidence that it is left to rot / other lease owners in the block are unhappy / charges are extortionate and without controls over increase. Owning freeholds can be a small landlord business.

Look at all the flats you see - big blocks, small blocks, maisonettes in terraces, conversion flats in terraces -all leasehold and the majority functioning fine.

You need to be alert (though your solicitor is paid to be that!) and there are bad experiences, but MN can be quite scaremongery and twitchily risk averse sometimes.

We don't all have the money to go straight to a house - and if we did we take on the whole cost of a new roof or drain, not just our share! So, swings and roundabouts.

I'd definitely buy a flat as a leasehold, provided there was a long time left on the lease. A house - never. My DD bought a leasehold house but ended up paying an extra £10k to buy the freehold.

The man co is probably appointed by the freeholder in that case. There could be a residents association.

These types of flats were built in the 60s/70s and build quality was not great. They are often in need of repairs now and any flat you buy needs a survey to flush out any maintenance issues. If there is no fund to pay for, say, a new roof, the leaseholders will be asked for contributions. There is nothing wrong with leasehold, but provision has to be made for repairs and maintenance and a fund should be established by the freeholder/agent/man co. The windows look quite new but the cladding at ground floor level looked poor. Any issues with the roof, and it’s a lot of money. However, if you own a freehold house and you need a new roof, it’s also costly. There is no way round maintenance and repairs/replacement whether it’s freehold or leasehold.

The one man company with previous directors with the same surname name, isn't in South Essex is it?
Some leases, if not most, specify that the directors have to be owners so the set up is slightly strange IME. DH and I are LL ( sorry MN!) and have experiences with several management companies over the years, and have ended up as Directors a couple of times to try to ensure good management of the Developments.
We have pulled out of a purchase because we were unhappy about the content of the lease- mainly lack of clarity about maintenance. Specifying that the external woodwork has to be painted every X years is a pain, but makes sure the building has a chance of remaining in good condition otherwise people will put it off indefinately and then the windows fall out. ( Poor example but you get what I mean)