Which house should we buy?

[HollyLondoner]

SE England
Married couple in 30s with a young child
£700 a month for 2 days at nursery
Combined salaries of £65k/£4k a month

Option 1:
Little 2 bed Victorian terrace in the area we currently rent
Lovely neighbours and lots of friends
Terrible parking (people park across your front door and you have to walk down the middle of the road with a buggy from all the cars on the pavement)
Shit schools
A little sketchy
£270k
£1400 a month

Option 2
Shared ownership 20 years old
105 years on the lease
30% share for £100k
Very desirable area
Woods on doorstep
Fantastic schools
Drive way and garage
Massive garden
Not really our style and wish we could afford outright but still a lovely house
£900 a month

Id be looking to make option 3 work.
Neither sounds ideal. But then I live somewhere much more affordable than London, which gives me different options, so it's easy to say.

option 1 is a terrible idea and you’ll grow out of it very quickly. 2 is also not great. I don’t think either of these will work op.

I wouldn’t go for the shared ownership because it seems like more house for your money at the moment, but there are, unfortunately, plenty of people who are critical of shared ownership and the people who choose them. It’s not right, but it happens.

Of course you could buy one as a short term option, but what then? You have another child, the house is too small, but you can’t sell.

It would be a clear house 2 if the lease was longer. That's far to short.

Just seen it does state renting in option 1.

I think your heart is with Option1 so I'd go with that.

Definitely not a forever home but just want to stop renting and we now have a deposit finally saved (£30k).

Not to sound negative but it's very hard to find a good option without a hefty amount of money behind you!

Option 3 or 4. Keep looking.

I've owned loads of leasehold flats ( 4 in total) , my current flat is share of freehold though so I'm my own landlord who issues my own lease to myself. I've owned 2 houses freehold , both Victorian and don't see whats so great about it.

Bit dramatic to say all leases are shit! any leaseholders can get together if they've owned the lease long enough and buy it off the freeholder anyway as long as two thirds of the block agree.

Sounds like you got burnt on a shit lease. Most solicitors are woeful checking them , so as long as you fine tooth comb it or at the very least ensure someone does, you wont get burnt.

All flats have leases, so they are pretty hard to avoid! OP is buying a house, and will only have a lease to ensure the portion they don't own is retained by housing association , so they can charge rent.

It depends on the fine print of your lease, pretty easy to extend any lease, we got a flat with a low lease and as the seller owned the flat for over 2 years, we ensured they sold it with assign benefit of the notice, so we extended straight away, the freeholder couldn't refuse and if they try some outlandish valuation you just threaten tribunal and their solicitor will push the freeholder to cave in for a fair market price.

Some people prefer owning houses freehold over leasehold flats, I get that, both have pros and cons and its personal choice. I wouldn't say one was better than the other, you pay a service charge or you keep a fund to upkeep your house and pay buildings insurance.

OP is renting so as I said, better part buy than rent in any scenario.

In my experience most issues in a leasehold come from the management company, assuming there is one, and that is hard to check as can change at any time. It’s easy to say that you can come together to buy out the freeholder but in my private block, myself and my neighbour were the only owner occupiers out of 6 flats - it’s not always as easy as you say.

and technically as a leaseholder, you are only a tenant for a defined amount of time.

I think if the reforms come into play soon, it will make it a much fairer situation as of course, lots of people use flats as a stepping stone onto the property ladder. I did, but I wish it was dealt with better.

Option two, save the £500 per month to buy a bigger share. X

Sorry, what you're saying is simply not fact.

If you buy a lease, your solicitor should be requesting a pack with all this info clearly in black and white, if its not forthcoming you don't buy it!! You should know of any planned works and the management accounts !!

A freehold can't change at any time !!! Legally any freeholder has to offer it to the leaseholders first if they want to sell it, be they a company or individual, its the law!!

You're correct the freeholder can change the management , but there is clear redress leasholders can push back with government approved agencies if the management company is shit.

If you had 6 flats , you only needed 4 flats to agree to buy out the entire freehold yourselves and you can find out who the leaseholders are by either a) simply knocking on the door and asking your neighbours who the landlord is as your buying the freehold, or looking up on the land registry for a tiny fee, if they're all tenanted , those renters are paying someone who owns the lease. It isn't difficult.

Its beyond me how people buy property and spends hundreds of thousands of pounds and do no research and inform themselves of what they're getting into.

If anyone is reading this in a similar position to this poster contact the below, all this info is free and dispels any nonsense.

https://www.lease-advice.org/

Option 2. Better than renting like you say and it’s not your forever home.

i feel the op’s post is being derailed.

But, I didn’t say the freeholder can change. I said the management company can. My lease was written in 1980ish when the flat was built. I have no issue with the lease. The management company are the ones responsible for the costs associated with cleaning, sink funds, electricity costs in communal areas etc, the general maintenance, insurance costs. That is where you can come unstuck and have a good or bad experience.

if there is no issue with leaseholds, why does the website you mention even exist and why is a bill being passed in the House of Commons as we speak?

Of course you can have a good experience but people need to be careful.

and you seem to be ignoring the fact that as a leaseholder, you are essentially a tenant, be that for 50, 100, 900 years.

Option 2 isn't a flat, it's a semi detached house with a drive and a garage so a much better option than our current rental. We could save a great deal and look to buy something else in 5 years. We're going to make an offer in the morning but we were one of 15 viewing!

Good luck OP.

You wont regret it.

I appreciate that , but if a freeholder appoints a crap management company, you do have redress, that's my main point.

You talk about tenancy of a leasehold like its something similar to renting, not everyone wants a house and with flats you CANNOT AVOID IT .

For part buy part rent, your freeholder is a non-profit, not a property company who only care about profit. That's a huge difference.

The issues with leaseholds are badly written contracts like 10 year increases in ground rent, its greedy property companies who try and screw over people, fundamentally a lease is essential if you have a block of 6 flats, or even 2 flats, no bank in the land will borrow you money on a flat with no lease.

Lease reform is needed for the sharks out there, just as landlord reform is needed for renting out your property, such as no-fault evictions.

I don't think you understand the problem isn't leases which are essential in buildings with more than 1 dwelling , its the paperwork around them.

I know it’s not a flat, it was unfortunate that the post got bogged down (by me too) in flat talk. But the potential leasehold issues remain, whether a house or flat.

Good luck though with your offer. I am amazed at the price, if that includes the rent part and the mortgage, it is much cheaper.

The leashold issue doesn't remain with a house, there's no management company or service charge for one dwelling. The only reason a house is on shared ownership is so the non-profit can charge rent on the 70% they own, should OP staircase to 100%, she'll own the freehold.

@Tulipvase you admit yourself the issue is management of multiple dwellings in one buildings , this doesn't impact OP.

I’m not saying it’s the case for the OP, she needs to check carefully but are you not aware of the leasehold scandal surrounding new build houses being sold as leaseholds and the buyers were unaware? And the fact that there were hidden clauses including doubling ground rent?

At the end of the day, the companies that are selling shared ownership properties aren’t doing so out of the kindness of their hearts.

But I appreciate it is necessary and not all of these companies will be out to rip you off.

I know there are many cons to leaseholds but the price is great as the rent part is very reasonable. New builds charge twice as much as this as they're much more popular than a 20 year old house like this.

It's in fantastic condition and we're waiting to hear back by the end of today if we've got it. I think we're the only ones not in a chain so fingers crossed!

We could comfortably pay for childcare and save a few hundred a month so seems a good option. Also do fed up of the crazy parking where we live!

Rent is £380
Service charge and ground rent £9!

Prioritise secondary schools and work backwards from there. 9 years will go very fast. If you are planning to move again before secondary, strategise it - not just “and then we’ll move again for secondary”. Where will you move and for what secondary? Will you be able to? Primary schools are generally fine and lovely unless really terribly shit, but there aren’t many of them.

Believe me, it is all about secondary school abd having an option you are happy with. Everything else must serve that.

@flamingo where this house is has one of the best secondary schools in the city so a really good option. Current location has the worst...

We would definitely hope to staircase in the next few years and may just stay. I'm saying this as if we have the house but we still don't know yet!

Option 2 is sounding better and better. Good luck OP, fingers crossed for you.