House buying and leasehold

[Nessanewyear]

Would buying a terraced house with a leasehold and not freehold be a future problem?

Your solicitor can check the length of the lease and providing it’s a long lease with nominal ground rent and it’s doesn’t double every 10-15 years it should be fine. You can buy the freehold but it can be expensive as there’s no cap on fees at the moment (usually costs around 1k - 1750 including your own solicitor fees).

Leasehold tenure in older properties is quite common and on a lot of properties like you’ve described the ground rent is usually nominal (anywhere from £10 to £100 per annum).

You could obtain a copy of the lease from land reg and have a look? That would cost around £20 or so.

Depends. Older houses were often leasehold, and have very long (remainder of 999 years) leases with peppercorn ground rent. These aren’t so much on an issue.

However more recently developers have used leasehold as a licence to print money, with short leases, ground rent quickly escalating to very high levels.

There is an increasing nervousness amongst buyers and mortgage lenders towards lesehold houses. You could make it a condition of your offer that is be sold to you as a freehold house, with the sellers purchasing the freehold first.

Agree with previous posters. Newer build so-called “fleece holds” with rising ground rents and service charges can be problematic and very difficult to sell on. Avoid those.

Traditional leasehold, not so much: we have a 1950s leasehold house - 999 year lease at £12 a year fixed ground rent, no mechanism in the lease for charging or recharging service charges. Not uncommon in this part of London, the freeholder is a well known conservation estate. Our freeholder is largely absent and unbothered (as we aren’t a money-making exercise): if work needs doing to the structure we advise of what we’re going to do and then get on with it just as if we were freehold. We had to request permission when we wanted to build a home office in the garden, but again, they weren’t fussed. You want your conveyancer to review the lease and also question the vendors and freeholder about things like that, so you can be confident there isn’t going to be friction.

What length is the lease ?

I lost a lot of money years bk on a lease property

Id definitely advise freehold over leasehold

As others have said, it really depends on the type of leasehold - and the context of the area. I've just sold in a town where leasehold was standard, but even with that, not every leasehold was the same, so it's worth being sure what you are signing up to. I had a property on a 999 year lease at £10 a year and I thought about buying the freehold, but I really couldn't see any good reason to spend thousands of pounds to "fix" something that wasn't really broken. The only impact other than the £10 a year was having to let the leaseholder know if I did any major work (they didn't care or object) and it cost an extra £275 when I sold for the "leasehold pack". Funny thing is I've just bought a freehold property, but it's on a private road and the "management fees" for upkeep of the private road are far more than my leasehold ever cost.

Depending on the lease length and associated costs (ground rent, service charges, etc) as well as if other houses in the area also have a lease. If yours is the odd one out and other comparable houses don't have a lease then that might make it difficult to resell unless it's priced much lower than a similar house which is freehold. Personally I opted for a small two bed house vs a two bed flat because I didn't want to deal with leases and I would never had looked at a house with a lease.