Leasehold house

[Xmasdread22]

Thought I'd found my dream house but now a relative is putting doubt in my mind about it being a leasehold because ground rent and service charge can both be increased. Asked estate agent at viewing and he said it wouldn't have a service charge but right move says it does and I sent this screenshot to him but he only responded to a question about ground rent and said it had been £18 since current owner lived there since 2007. It seems unusual for a house to have a service charge, it's not a new build or bought off plan and it's on a cul de sac. Advice please what would you do, what questions would you ask?

Not sure about questions but start by spending few pounds buying deeds for the property if you haven't already, they usually hold some information. Hope it all works out for you.

Thank you Sunshine, how do I buy the deeds please?

Laws on leasehold are changing. New builds must have zero ground rent, since 2022, although they can still have service charges. But this is an older property.

I can't think of any reason for there to be a service charge on a stand-alone property except for someone to turn an unreasonable profit.

If it's a terrace or a semi, and the service charge/leasehold are shared with next door, to cover things like the cost of repairing the roof and drains etc, I think all leaseholders can get together and buy the leasehold, and run the service charge company as a private trust, which can actually be useful.

I've lived in a semi with a leaking roof, and the man next door just shrugged and said he wasn't bothered. 🙄. I'd get a solicitor to look at the terms.

https://www.gov.uk/search-property-information-land-registry

This is the proper site £3 for title info and £3 for boundary plan. 😊

OMG, I didn't even notice I'd clicked on a scam! I thought the charges had gone up ridiculously 🙄 Sorry, OP.

The only time I saw this when I was looking was when a house was on a private road.

It looks like the agent mistook the service chargé and ground rent ? Seems odd they are the exact same?
The ground rent can't go up willy nilly, that will be clearly laid out in the lease so if you are interested your solicitor will advise. It's got a long lease so no issues there.
Service charge on a house may be there to cover any common areas if it's in an estate or something ? Upkeep of any gardens or road maintenance. This you have less control over but you'd need to see how many houses are part of the leasehold and make a determination on whether it's a big risk or not. I'd say unlikely if it's a house.

There are different types of house with leaseholds. The newer builds on estates with big service charges that can get hiked up are bad news. But there are whole swathes of housing in some towns (like where I'm from up north) that are leasehold for some historic reason and don't have service charges or only have tiny ones that don't get hiked up. You need to find out which kind this is and whether it's an issue or not. Neighbours may be helpful, as well as sussing those deeds, but of course your solicitor will bottom it out fully as part of the purchase if you decide to buy it.

What's on rightmove was put there by the agent and as the amount is the same looks like an error. Also research buying the freehold, a 950 year lease is so long and ground rent so low it will probably not cost much.

It is somewhat surprising how passionate people have become over a ground rent payment.

The government proposes to cap all existing rents at a peppercorn, saving the average person about £5 per week. From what I have read, there could be a major challenge from the owners of ground rent income who argue that they relied on the promises made in the lease - I am inclined to think they have a point, but it does seem a bit spinless to sign up and agree to pay the £5 per week and then try and argue it's all unfair. I wonder whats next

Leasehold houses are quite common in certain areas of the country- they don’t tend to have a service charge, only a ground rent. As PP have said it seems like they’ve put the £18 of ground rent in as service charge on the ad.

Long leasehold houses in some parts of the country are very common. Usually the local big family would own the whole area that a town was built on and would reserve a ground rent and sell the land off on 999 year leases. The Curwen family in Workington Cumbria is an example of this practice. The benefit of these ground rents ended up with the local council and it was possible to buy the freehold from them for a fairly nominal sum. It may well be something similar here so buy the title and have a look to see what it says and if in doubt ask the estate agents to ask the sellers solicitor to provide further clarification before you get your own solicitor involved.

I wouldn’t touch a leasehold house. Aside from the ground rent - check the lease, some double every few years - you will have to apply to the leaseholder to make any changes, no matter how minor, and you’ll be charged for doing so. There also might be restrictions on what you can do, which you wouldn’t get in a freehold house.

it all depends on how the lease was written.

We have a friend who has a freehold flat (I know yours is a house) - so no ground rent however as her flat is amongst a group of 5 flats in the building she still has to pay £3K for service charge a year for someone just to take the bins out and vacuum the common areas despite being freehold! And because there is a management company, when they did renovations it cost them £5k to get the plans approved even though they are freehold. Ridiculous whereas we know someone else with a leasehold and they pay £0 and no service charge. They also did renovations and didn’t pay the freeholder anything for it to be approved.

my point is - leasehold doesn’t mean it’s bad and freehold isn’t always better. It really depends on how your lease is set out and whether there is a management company involved even if it’s a freehold