Barcan+Kirby solicitors have the facts
Leaseholds have been in the news for years; whether there’s proposals to ban them on new build houses, or there’s a ground rent scandal, they show no signs of going away.
But why are leasehold houses so topical? It’s because some developers added clauses into leasehold contracts stipulating that ground rent should be doubled every 10 years, having started at around £200. This in turn has meant some properties have become unsellable, because of the high ground rent.
However, this doesn’t mean all leasehold properties are bad, and it shouldn’t put you off purchasing one, especially if it’s a new build property. Conveyancing associate at Barcan+Kirby Gabrielle Artess discusses the best way to buy a decent leasehold property.
When you buy a new build property from a developer, there’s a good chance that it’s a leasehold property. With leaseholds, you don’t own the ground upon which the property is built. Instead, you lease your home from the freeholder, which gives you the right to occupy the property for as long as the lease is valid.
The two main points to look for are the length of your lease and the ground rent. A 999-year lease with a £1 rent is great. Leases tend to be difficult to mortgage once there is less than 85 years left to run on the lease, and progressively more expensive to extend when there is less than eighty.
In all cases, leaseholders have certain obligations to the landlord – such as the need to pay ground rent and service charges (both of which can be variable), and often having to seek permission before making certain home improvements.
In some cases, the leaseholder will be able to purchase the freehold from the freeholder, enabling them to own both their property and the land on which it stands.
Many people would urge caution when buying leasehold property, but provided that there’s a well-written lease and the building is properly managed, there’s no reason why a leasehold flat or house shouldn’t provide the basis of a good home and a secure long-term investment.
If you would like any further information, contact Gabrielle on 0117 325 2929 or at barcankirby.co.uk.