Leasehold- have we made a huge mistake?

[Creativebee]

We put an offer in on a house last week, it was between two but we decided to slightly increase our budget and put the offer in for this house. We knew it was leasehold but I always assumed that leasehold meant that the ground/land the property was sitting on was the lease part not the actual property. I tried to ask EA but they have no idea and said all they know is that it’s leasehold 🙄. I’ve purchased the registry title for both the property and the associated land, both say leasehold, this is how it is written:
A: Property Register
No price recorded
This register describes the land and estates comprised in this title.
I am assuming where it says estate that means the house itself?
DH and me are panicking because from what we’ve read you can’t even do a loft conversion, add a conservatory or alter the property without prior approval from the freeholder. Have we just lost out on the other property (the other one we were interested in has now SSTC) and put an offer in for a house we could do nothing with? I know we can pull out as it’s only an offer but we really don’t want to. Can someone please give some clarification?

My neighbours bought an ex council, leasehold, first floor maisonette about 10 years ago.
When they wanted to convert the attic space into a living area they had to buy the attic space from the council, as the leasehold only included the maisonette itself.
It cost around £15,000 to buy the attic space a decade ago, but this was on a rursl welsh property, so probably a lot cheaper than it would be in other parts of the UK.
My other neighbour...identical maisonette...converted his attic into a workroom, but as he didn't add windows he didn't inform the council and hasn't paid anything.
I think leasehold is a minefield!

Hi OP, I'm a (former) property solicitor.

If you can download a copy of the lease from the Land Registry, there will be a section in there that explains what exactly is included. However, I would assume it is the entire property (house and garden) that is leasehold. You could also download the title plan under the same title number as the leasehold title register, if the house is not included in the leasehold title it will be obvious.

You're lucky, we've just been given a Section 20 notice for an estimated bill of £14,000 - to be payable over ONE year!!

Unfortunately this landed through my door mid sale :( so I'm still in a fight with the leaseholders about it, buyers won't proceed until it's sorted (long story but I don't think the lease allows them to do the work, they think it does etc etc...) nightmare.

Would never buy leasehold again!

That’s a leasehold property - the full extent of what is included within the lease is leasehold, the land and buildings (house) on it, the lease itself will define the extent of property demised by the lease and include plans showing it - here likely the house and garden.

if you are concerned you need to find out who the freeholder is and then see if you can purchase the freehold title as well. As it’s a 999 year lease the value has been passed down almost entirely to the leasehold so the freehold will not be worth that much (as no chance of getting lease extension money from you etc) and the freeholder may be very happy to shift it

The ground rent can go up. Look at the terms. Some rents can go up by half as much again every year or two until eventually you can't sell the house because no one can afford the ground rent. I thought they were illegal now. Don't touch it OP.

@bibbingo I wish it was obvious, it most probably is but I definitely can’t make sense of it. I have downloaded the title for both the land and property and they are exactly the same, the drawing just has a red line showing the land surrounding the property, it says: The Leasehold land shown edged with red on the plan of the above Title filed at the Registry and
being address of the property.

The plan shows the edge of the boundaries (in red), so if the red encloses the house + land on the title plan for the leasehold title number, it's all leasehold, which would be the normal case. I hope that helps? Happy to answer any other questions if I can?

@bibbingo thank you so so much the line encloses the house so it is all leasehold. It’s not great but at least we now know. Thank you so much

I'd personally pull out.

@Creativebee no problem at all, happy to help

Older leasehold houses on very long leases, like this one, aren't necessarily always the nightmare that new build ones are. Take advice from your solicitor about the details within the lease and go from there

Property solicitor here. I wouldn't panic.

Tell your solicitor that you want the freehold included in the purchase. With the long lease, it's not going to be of much value to the freeholder so shouldn't cost much. The seller is going to be contacting the freeholder for a leasehold pack anyway so can enquire about this at the same time.

You may be looking at extra legal fees for the freeholder, seller and yourself as well though.

@mackers1 thank you for that advice, can the freeholder refuse to sell? We need to adapt the property regardless so that’s why we don’t want to end with a property that is useless to us and if we get so far where solicitors are involved am I right in saying we can’t pull out?

Any owner of anything can refuse to sell something they own.

It sounds like there is 54 years left on the lease if it was 99 years from 1978…

This makes the lease more valuable of course and the owner (freeholder) may intend to pass this on to their children or something, in which case in 55 years you will be out on your ear with no house.

Looking at this:
https://www.freeholdcalculator.com/freehold_simple.php

It might cost you around £50k to buy the freehold if it is only 54 years left.

Personally I would never buy a leasehold.

@GatesOfBabylon It's 999 years from 1978

I’m in the northwest, my ground rent is £3 a year so I’m not bothering to buy the lease. The company is crap and you can only write to them you can’t ring or email etc. I’ve had an extension on my house years ago and didn’t need permission.

Also in the northwest in a Victorian terrace. My ground rent used to be £4 a year payable to the 'head house' (next door but two). But a nice bottle of red at Christmas was also acceptable. I bought my freehold about ten years ago for £600. Never asked permission to do anything.

Both our houses have been leaseholds, it's very common in our village for the properties to be leasehold as a lot of the land used to be owned by the church. With our first house we didn't know who the freeholder was, no never paid any ground rent but couldn't buy the freehold either. With this house the ground rent was about £80 IIRC. We bought the freehold last year for £1000. It was really simple, the freeholder did it all for us.

@Ilikewinter
As a PP has stated I would look into the advantages of owning the freehold it would make the property more valuable, easier to sell and more attractive to purchaser's.
I lived in a flat and we bought the freehold from the management company and ran the maintenance ourselves as a residents association. It was far better and allowed the standard of the development to improve vastly.

@Creativebee

Look at www.lease-advice.org

You can pull out anytime before exchange of Contracts takes place.

Raise the matter with the sellers. Let them make the enquiry as to whether the freeholder is prepared to go down the informal route. If not, the statutory route will be the way. Your solicitor should be able to advise you.

Thank you all so much, I’ve been reading the responses with DH and we both feel like there is a glimmer of hope and all is not lost just yet. Some of these responses are positive, I know there are issues we need to be aware of and we’ve written down everything we need to ask the solicitors, some things raised here we would never have thought about so thank you all.

Hope it all works out for you. My experience was not good with leasehold and I would not buy another . We were given a 30 grand bill for works while trying to sell and the sale only went through because i dropped the price and we lost thousands. But for the stress i had with the company who owned the freehold it was worth it to get out. My solicitor did not explain at all what leasehold meant and i went in not knowing what i was signing up for. I wish you luck, I just wish someone had told me you can have a massive bill for works and you have to pay it, as well as monthly charges which can go up .

@orangeandpineapple7 It’s very different for flats as opposed to houses that were leased 40 odd years ago.

The information that you didn’t receive should be standard in a leasehold report letter.

I'd avoid any property that was not a freehold.

Older leasehold houses are generally not a problem. Bear in mind that lots of newbuild estates have restrictions on alterations of freehold houses anyway.

I'm having this same issue now :( bill for works dropped mid sale. It's a nightmare and so incredibly stressful.