fitzscoob

Can anyone here add any experience they have had with leasehold properties?

I have just sold my house, and I am looking to get myself a bachelour pad, which generally means a flat as houses are out of my financial reach.

Many of the flats or maisonettes have leases with 70 years ish left to run.

The questions I have are as follows;

At what stage does a potential purchaser get put off by the age of the lease, 10 years to run, 20 years to run etc?

What sort of costs are involved in extending a lease (if the property is worth 150k)

Assuming that the market does not go pop, and values rise steadily on a small percentage. What happens to the value of leasehold properties, as each year the lease runs lower does the property depreciate because of this?

Thanks

Account deleted by request

IIRC some mortgage companies start to have issues at 60 years but most will lend upto 45-50. Below that you will struugle.

To be honest there isn't a hope in hell i would buy a property with a 70 year lease as it will be a factor in any sale in the future. As each year goes by it becomes more of a problem when selling.

If you see somewhere with a short lease and want it, it is not uncommon to make an offer subject to the lease being extended to say 99 years. Then the vendor can negotiate with the freeholder. Believe it or not this can cost as little as £5000. A vendor in the current slow market may well be happy to do this.

From my (albeit little) experience in london this is not the case, most freeholders want big bucks to extend leases. Anywhere outside you should be fine.

chop

stilover

All depends on how long the lease has to run when you buy. Say you bought new, and the lease was 100 years. You assume that you will move in 5-10 years time. So selling shouldn't be a problem. If only 20 years remaining, then yes it would be quite hard to sell unless the buyer didn't quite understand the legalitise of buying Leasehold.

I live in Leasehold flats, and I think there is 90 years left to run, so I'm not concerned at all. Ground rent is only £50pa. Worth checking what the ground rent is where you're thinking of buying, as added to the management fee's, it can soon add up.

some info:
Information on Leasehold Properties

miff13

The general rule for lenders is there must be 30 years plus the term of your mortgage left on the lease, so as most people have 25 year mortgage terms (or they did, now 35-40 years is not uncommon) 55 years is the minimum, but I have dealt with one lender who wanted 70 years. Personally I wouldn't buy a flat with 70 years left on the lease without making it a condition of your offer that the seller negotiate (and pay for) the term to be extended to it's maximum.

Luminous

iTrader: (3)

I hate leasehold. You are always going to depend on the goodwill of the freeholder not to screw you over. They can charge what they like, which just really sucks

noobyscooby

1. Don't buy any leasehold property with less than 75 years to run. You live in it for 20 years you are down to 55 - not so good as the next person should do the same sum.
2. Check the annual charges.
3. What maintenance is coming up? Roof, walls, windows, decorations to common areas? If concrete used, is the concrete OK. My block of flats had a major problem [after I had sold!] which cost residents £000s each.
4. What is the freeholder like to deal with?
5. Is there a residents company or association?
6. You can buy the freehold, or your share of it. What is the situation on this?

Personally, I'd prefer to buy freehold.

SiDHEaD

We're looking at houses at the moment. If it is leasehold, does this mean you can't build a garage?

fitzscoob

Thanks for all the information offered, plenty of food for thought here.

Cheers

Fitz

Account deleted by request

There are very very few leasehold house. Leasehold relates to 99% flats. In answer to your question though, no unless you had prior permission from freeholder. As technically with leasehold you own the property but not the land it sits/stands on. You effectively are on a very long term 'let' of the land.

chop

speedking

We tried to sell our 3 bed semi house with 60 years leasehold left. The buyer's solicitor insisted that we purchase the freehold. We did this for about £500 (Manchester City Council). Hassle was the time it all took.

richardg

i wouldn't be too concerned about this. security of tenure is covered under leasehold reform act and/or landlord and tenant acts (can;t remember which though). as stated elsewhere in this thread though, an extension of the lease is something you would generally have to negotiate with the landlord.

there is a lot of case law on landlord's (and tenant's) conduct and lots of legislation so whilst landlords can't really do exactly what they want, when they want, many tenants won't be aware of how to protect their rights and so may well believe they have no power or influence.

regardless of what you bnuy, i would recommend you always keep a copy of your title and your purchase agreement - know your rights and keep a record of them!

HTH

richardg

not quite that simple. depends very much on the detail in the lease, ie the tenant's rights. you may find in that sort of situation that you could obtain a licence to build a garage (which assumes you have enough space within the "property" (ie the area subject to lease) to build a garage and that you would porbably have to accept you would be liable for removing it at your own expense if the landlord decided to take your licence away....

so you may be able to build a garage even if the property is leasehold, but it very much depends on the lease.