Naomi O’Brien, solicitor at Barcan+Kirby, discusses the best way to buy a decent leasehold property
Leasehold houses have been in the news for years; whether it’s a proposal to ban them on new build houses, or there’s a ‘scandal’ around ground rent, it shows no signs of going away.
But why are they so topical? That’s because developers started to add clauses into leasehold contracts that ground rent should be set at £200, and doubled every 10 years – not great for those who wish to remain in their property for the foreseeable future. This in turn, has meant some properties have become unsellable due to the high ground rent.
However, this doesn’t mean all leasehold properties are bad, and they shouldn’t put you off purchasing one, especially if you’re buying a new build property.
When you buy a new build property from a developer, there’s a chance that it’s a leasehold property. Unlike freehold properties, with leaseholds you don’t own the ground upon which the property is built on. 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 vast majority of leases are long-term – 90 to 125 years is standard, but some are as high as 999 years. However, leaseholders have certain obligations to the landlord – such as the need to pay ‘ground rent’ and service charges, as well as having to seek permission before making home improvements or changes to the building or its structure.
In some cases, the leaseholder will be able to purchase the lease 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 if 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.
If you would like any further information, contact Naomi on 0117 325 2929. Alternatively, visit us at www.barcankirby.co.uk