Would you buy a leasehold house?

[floofycroissant]

Victorian property, over 900 years left and annual ground rent of £4.

I know ideally I would buy freehold, but I've already blown thousands on rent trying/waiting for the right property to buy in the current market craziness. On paper this seems as good as a leasehold can get - right?

Have I missed any potential red flags?

No

Who is the leaseholder?
I am in a Victorian house with a long lease and an absent (dead no doubt) freeholder. Nobody to pay the peppercorn rent to of £3 a year. It has zero impact on us. I might get round to applying for the freehold one day but no need right now.

I wouldn’t touch a modern leasehold.

Plenty on here say no automatically without distinguishing the differences.

Absolutely not. Don't do it.

I disagree. Where I am it's commonplace.

'Really earsup? I'd read £8k-12k online. I'd buy it in a heartbeat at a low price. I have noticed that none of the neighbours haven't, which makes me think it's not that affordable.'

Alternatively it may well be like mine which is £150 to buy out but no one has bothered because there's no disadvantage to remaining on a long lease. Just one of those things people never get around to!

I really wish people wouldn't comment on threads they know nothing about. Old Victorian long leases, as others have said, are nothing like newer leasehold properties.
Yorkshire here, and every terrace is on a long lease. Duke of Norfolk's land, I believe? All three of our houses have been on a long lease of circa £2k a year. We could've bought the last lease for £700 but didn't (and none of the neighbours did either) as it's such a non issue.

It doesn't affect saleability either, as people actually buying in these areas know the score....or at least they learn, the minute they start looking at houses.

fellrunner85 Wed 17-Feb-21 08:06:25
I really wish people wouldn't comment on threads they know nothing about.

This.

@fellrunner85

A number of us have said this. There is a lot of ignorance being displayed by posters who don’t understand the difference in leases between modern ones and 999 year ones.

Absolutely. Not only is it irritating, but it could stress out the OP unnecessarily, over something that is entirely normal.
Also, there was a typo in my last post - clearly we pay £2 a year rent, not £2k!

It doesn't affect saleability either, as people actually buying in these areas know the score....or at least they learn, the minute they start looking at houses.

Exactly this! Posters who have no experience/knowledge are scaring the op completely unnecessarily.

@tanguero

fellrunner85 Wed 17-Feb-21 08:06:25 I really wish people wouldn't comment on threads they know nothing about.

This.

I really wish people would refrain from the "my friends and I have never had an issue, so there is no issue" kind of attitude.

That's a very shallow and short-sighted approach.

Maybe it's because a big part of my job is going through the minutiae of legal contracts and close any potential loophole with which the counterparty could ---- us, but the fact that you and the people you know haven't had any issues is, forgive me, almost totally, completely and utterly irrelevant.

The REAL questions are:

• what is in the leasehold contract?

• how often and by how much can the ground rent increase?

• most importantly, are there management charges or any other kind of charges or costs? Everyone thinks of the ground rent but these charges can be much larger. If there are, do you have any say? In very few cases, leaseholders have a say in appointing the managing agent, in most they don't

• what are the obligations of the freeholder? Are there common areas that need to be maintained?

• do leaseholders need the approval of the freeholder for works / renovations etc? What paperwork do they need from the freeholder if they want to sell? I know of quite a few cases of purchases that fell through because the freeholder took forever to provide the paperwork

Someone mentioned the freeholder doesn't even bother collecting the ground rent. To be honest, this wouldn't make me sleep at nightn(unless I got a bulletproof legal opinion, but who pays for that?) because there are typically clauses whereby leaseholders give up the lease if they don't pay the ground rent.

PS What I mean is that, IF the ground rent is small, it cannot increase exponentially, there are no other charges and solicitors have explicitly confirmed that there cannot be, sure, consider it.

If instead there may be additional charges but so far there haven't been, I wouldn't touch it with a bargepole. But of course I get it that many people will feel differently.

These 999 year leases rarely have management fees. Payable to whom? For what? This is the ground rent issue too. They are not collected because the freeholder does not arrange collection. These properties are frequently terraced streets with a back yard. Who will say you cannot alter the house? Rarely would this be an issue. There is little to substantiate any of these concerns. That is not to say the questions should not be asked but it is scaremongering to say these leases are like modern day leases and have modern day strings attached. They are often totally different.

"That is not to say the questions should not be asked but it is scaremongering to say these leases are like modern day leases and have modern day strings attached. They are often totally different."

I am not saying that every lease is like modern fleecehold.
I am not.

Please read again what I wrote.

I am saying that buyers need to do their due diligence and ask not just if there have been any issues until now, but if the leasehold contract is such that issues might arise in the future. The fact that they haven't until now is no guarantee that they won't in the future!!!

@ParentOfOne

"That is not to say the questions should not be asked but it is scaremongering to say these leases are like modern day leases and have modern day strings attached. They are often totally different."

I am not saying that every lease is like modern fleecehold.
I am not.

Please read again what I wrote.

I am saying that buyers need to do their due diligence and ask not just if there have been any issues until now, but if the leasehold contract is such that issues might arise in the future. The fact that they haven't until now is no guarantee that they won't in the future!!!

But I think what’s being highlighted - when talking about people posting when they don’t know what they’re talking about - is the sheer number of people who jump in immediately with “No, no, no way!” without thinking about the individual situation at all and how there are very different types of leasehold.

Of course people should ask questions and if there are any gaps in the information whether this can be indemnified. But it’s daft to just shout NOT A CHANCE when old peppercorn rent leaseholds are hugely different to modern ones.

Again - all this is totally standard for tens of thousands, if not hundreds of thousands, of terraced houses in the UK. There are no service charges or management fees. These long leases are completely different from modern leaseholds.

As part of the conveyancing process, solicitors do the leasehold checks and ensure there are no surprises coming. It can add a bit of time onto conveyancing, but not loads (our last sale still went through in 12 weeks).

In terms of additional rules on the property, these were set in the 1800s and sometimes can be fun. In one of our previous houses, we were technically forbidden from slaughtering animals for the production of candles on the premises.

If you're not into DIY animal slaughter, you have nothing to worry about OP. And even if you did, your solicitor would flag it, because conveyancers in many parts of the North will see these things every working day of their lives

The cat is pleased to hear he's safe fellrunner85 if times ever get tough

We'll be asking all the questions raised on this thread. It's really interesting, I was unaware of the differences between old vs new leasehold, but now I feel less intimidated and more prepared. In a way I'm kind of glad it wasn't mentioned prior to our offer as we'd have likely dismissed the property outright.

But I think what’s being highlighted - when talking about people posting when they don’t know what they’re talking about - is the sheer number of people who jump in immediately with “No, no, no way!” without thinking about the individual situation at all and how there are very different types of leasehold

Exactly this

And I'm glad the cat will be reassured, OP!

I am saying that buyers need to do their due diligence and ask not just if there have been any issues until now, but if the leasehold contract is such that issues might arise in the future. The fact that they haven't until now is no guarantee that they won't in the future!!!

I don't think anyone is saying that the OP shouldn't do her due diligence, are they?

They're just pointing out that this is commonplace in some parts of the country and therefore there is no need for the OP to panic.

"As part of the conveyancing process, solicitors do the leasehold checks and ensure there are no surprises coming."

Allow me to be sceptical. If all solicitors did their job properly, we would not have had the fleecehold scandal.

"I don't think anyone is saying that the OP shouldn't do her due diligence, are they?

They're just pointing out that this is commonplace in some parts of the country and therefore there is no need for the OP to panic."

Not quite. Most of the feedback was along the lines of "it's common, never had an issue, so don't worry your pretty little head".

I don't remember many answers along the lines of:
"it's common, but the fact that I have never had an issue doesn't mean you won't - these are the things you need to quadruple check before finalising what is probably the most important financial decision of your life"

Usually I wouldn't but £4 ground rent and 900 years on the lease is decent. It might be a bit sticky when you come to sell on.

No it will not. It is a standard amount for older properties.

Those terms? Yes.

The modern leaseholds are where the leases have been sold on to other companies. Therefore it is difficult for a solicitor to predict the future and warn anyone of future charges. Buyers can also disregard what a solicitor warns against as well.

There are all sorts of local issues that are not always known about. Land becoming part of the local development plan, building infrastructure in the locality in the future and all sorts of things that might not be desirable, and indeed are not yet known about. You can only advise on what is known and it is "advice".

As seen on these threads, people will believe what they want to believe.