Offer accepted but now found better option

[solario]

We had an offer accepted on a property last week. It's a lovely house but not in an area we love.

Today we had the chance to see another property in our first choice area. It's smaller but in an infinitely better location for us and our schools and everything. We are seriously considering making an offer and pulling out of the first purchase. We'd feel bad about it, but if the new offer were accepted, it would be such a better place for us to live.

As FTB, it's all new to us. Would we have to redo our mortgage application from scratch, or could the one we've submitted be amended? The new property is cheaper, so we could put down more and borrow less.

The new property is a leasehold, whereas the other one is a freehold. Is there anything we need to consider with that change?

We're at such an early stage with the first property that we've not accrued much in terms of expenses, but we want to decide quickly so as not to impact the first seller for any longer than necessary.

I had a leasehold flat in a converted terrace with one other flat - about ten years ago the other owner and I bought the freehold together - it cost £20k. So there are options, but yes - look very carefully at the lease - who is the owner, etc. For us it was the previous owner who had bought the property and converted it. He retained both freeholds when he sold to the two of us and he was a complete nightmare - made any jobs we wanted to get done incredibly difficult, tried to bribe us, harassed me. It was horrible.

What everyone else said. Leasehold if you have no choice and research thoroughly. Freehold if you can. Then you are buying something that actually becomes yours.

Thank you for all the feedback. We're leaning away from the leasehold property now. Even though it's in the perfect area, the drawbacks seem potentially too risky. That said, we're trying to see a copy of the lease and will maybe discuss it with our solicitor next week.

I had a beautiful flat above a commercial premises. If it isn't currently a restaurant etc then there are prob restrictions that would prevent it becoming one. I never struggled to get a mortgage on it - yes, there were slightly fewer lenders but still a huge pool of them. When I came to sell, some people wouldn't even come to look because of being over commercial but it sold for way above asking price within a week without ever going on the open market.

Having said all that, I would always, always prefer a freehold house over a leasehold flat.

"A small contribution to buildings insurance".... that's absolutely not all you'll be paying to the freeholder at all. The agent is trying to appease you. Besides over time works need doing...eg. Roof 25k, repointing, redecorating, drains/gutters etc....split between flats you will have to pay.
150 years is really nothing on leasehold. You'll have difficulty selling on.

Swapping a freehold house for a flat over a business seems crazy to me, but I know location can be very important to some people. I'd rather drive to a location from my nice(er) home than compromise so much on a home to be in a desirable location.