Help With Property Laws

[SupraD06]

So in 7 years time if you do not secure the freehold ,you live in an unmortgageable house , ie you can only sell to a cash buyer !!

Is the house a repo,or under bank ownership ? or the previous owner passed away ? corporate owned?

The banks are super cautious now ,and that they offered a mortgage means the underwriters have factored in a price drop so should be reasonable value , unless they are recouping losses from a previous default

What does your solicitor say ?

I would offer 100k and take a punt

 

The house was not on the market for the last two years, it is owned by an elderly couple, who due to illness of the husband are now trying to sell, it was on the market for a few months last year, then for a few months this year.

Also you say in 7 years it wont be mortgageable, but the bank only require me to have 40 years on the lease, so ive got 27 years in the clear, or am i missing something?

 

Seems odd to me that they only want to make £75 a year out of that land, maybe there is no maintenance charge as you say?

I suspect the freehold won't be cheap, after all they are a business not a charity.

 

As i say i've no idea on the freehold price, i can only try and find out in the morning. Ive got paperwork showing they charge £37.50 half yearly, and no other charges are listed, also ive got no other paperwork from any company stating another bill for maintenence. It has a blocked paved drive and no front lawn, besides washing the windows, what maintenance could there be?

[Charlotte]

I don't understand the '7 years thing' either.

 

If you've been told it's £75 a year then that's what it will be - it will be ground rent. Maintenance charges/service charges etc are more common to a leasehold flat. This is not that uncommon - I have encountered a few property purchases of this nature in my time in conveyancing.

 

See if you can get a quote from their website tomorrow and take it from there? Perhaps have a discussion with your conveyancer with your worries etc.

[stevie_b]

Why did it not sell at 160k and 150k ? and why would it not drop further ?

 

That's not necessarily bad news for the OP. With the country trying to limp its way out of recession, maybe other buyers didn't have the required hefty deposit at the time.

[SupraD06]

I don't understand the '7 years thing' either.

 

If you've been told it's £75 a year then that's what it will be - it will be ground rent. Maintenance charges/service charges etc are more common to a leasehold flat. This is not that uncommon - I have encountered a few property purchases of this nature in my time in conveyancing.

 

See if you can get a quote from their website tomorrow and take it from there? Perhaps have a discussion with your conveyancer with your worries etc.

 

Thanks for that Charlotte, as i say, the only paperwork i have on ground rent etc is photocopies of the current owners bills, and it says £37.50 for the half year. I've got the owners phone number so i'll call them tomorrow aswell and just ask if the £75 a year is all they pay, and go from there.

 

That's not necessarily bad news for the OP. With the country trying to limp its way out of recession, maybe other buyers didn't have the required hefty deposit at the time.

 

This was what i was thinking, even at 140K unless you have a good deposit, it would still be quite expensive.

[Septic]

Have you not instructed solicitors?

 

The price of the house seems too good to be true. Your solicitors will make pre-contract searches and enquiries for you so you at least know what restrictions, charges etc affect the property.

 

You are only purchasing the leasehold title so you won't own the house.

[mistertwo]

If it failed to sell at 160k and you're getting it for a 140k, I'd get quotes as to extending the lease and knock this straight off what you've offered.

 

I'm dealing with something almost identical to this at the moment. I'm simply amazed that you're at this stage and there hasn't been something worked out for you.

[stevie_b]

If it failed to sell at 160k and you're getting it for a 140k, I'd get quotes as to extending the lease and knock this straight off what you've offered.

Maybe at 140k, the lease issues are already factored into the price.

[SupraD06]

Right, found out a few bits about it today, the £75 is the only charge for the rent, and their are no maintenance charges or services added on. I tried to get a quote for the freehold and lease extension, but they take 10-15 days to get back in touch. However, i also found out that alot of the houses on the street, and houses on the surrounding areas are still leasehold, and two years ago a larger house, with a larger plot purchased the freehold for 6k. Also there is no fee to the freeholder for extending the lease, you just have to pay the legal fee's to sort it out, and the land rent may go up.

 

Also as i've said, the house was on the market for a few months last year for 160k, then a few months ago it was up for 150k so me offering 140k is already 20k less than what it was valued at last year. And if its possible to purchase the freehold for less than 10k it will still be worth purchasing it, to up the value of the house.

[mistertwo]

Maybe at 140k, the lease issues are already factored into the price.

 

I wouldn't have thought so - it would have been sold if it was that cheap and you had money left to renew a lease.

 

Even in today's market - if it's priced to sell, it will sell. This seems to have been knocking around for a while.

[Schtuv]

I remember reading about this before, as I was considering buying the freehold for the land my flat's on. There's a lot of stuff around something called 'LVT' that put me off getting the freehold, but was nice for leaseholders.

[Charlotte]

Right, found out a few bits about it today, the £75 is the only charge for the rent, and their are no maintenance charges or services added on. I tried to get a quote for the freehold and lease extension, but they take 10-15 days to get back in touch. However, i also found out that alot of the houses on the street, and houses on the surrounding areas are still leasehold, and two years ago a larger house, with a larger plot purchased the freehold for 6k. Also there is no fee to the freeholder for extending the lease, you just have to pay the legal fee's to sort it out, and the land rent may go up.

 

Also as i've said, the house was on the market for a few months last year for 160k, then a few months ago it was up for 150k so me offering 140k is already 20k less than what it was valued at last year. And if its possible to purchase the freehold for less than 10k it will still be worth purchasing it, to up the value of the house.

 

Glad you managed to find out some more info - sounds like it should be fairly straight forward to purchase the freehold if that's the route you go down.

 

People get so scared and confused with leasehold/freehold.