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Buying a flat

steveo

mine to stay the same please
Joined
Aug 30, 2005
Messages
7,545
My son is looking to buy a flat which has 121 year left. Being somewhat old school, I am not completely sure about buying a leased property. Who owns the lease? What happens if they go skint? I would prefer him to buy a freehold property.
Pros and cons anyone?
 

rigsby

Life President⭐
Joined
Oct 12, 2014
Messages
14,594
My son is looking to buy a flat which has 121 year left. Being somewhat old school, I am not completely sure about buying a leased property. Who owns the lease? What happens if they go skint? I would prefer him to buy a freehold property.
Pros and cons anyone?

Are we talking purpose built block or house in Westcliff converted to 2 flats.
 

steveo

mine to stay the same please
Joined
Aug 30, 2005
Messages
7,545
Purpose built I think, Rayleigh High street
 

rigsby

Life President⭐
Joined
Oct 12, 2014
Messages
14,594
Purpose built I think, Rayleigh High street

Best to find the details first. How many in the block, is it above a shop, who is the current leaseholder is it a private individual or a company. Ask other owners about maintenance costs etc .
 

jassyfa1

Manager
Joined
May 19, 2008
Messages
1,500
I brought a lease hold property for my first flat. Over 100 years left on the lease. The only downsize was that I had to pay a yearly service charge which was meant to be for decorating the outside of the house. In the 10 years that I lived there no decorating was ever done by the lease holder.
 

Supernaut

Director
Joined
Feb 2, 2010
Messages
2,818
I brought a lease hold property for my first flat. Over 100 years left on the lease. The only downsize was that I had to pay a yearly service charge which was meant to be for decorating the outside of the house. In the 10 years that I lived there no decorating was ever done by the lease holder.
Similar story here - my first flat was a leasehold property, freehold was owned by a bunch of sharks masquerading as a property management company, never did anything to earn their extortionate 'service charge'. Never again.
 

MK Shrimper

Striker
Joined
Aug 6, 2005
Messages
52,348
The flat I lived in went through the ringer before I moved in - the management company basically defrauded the tenants by taking a huge sum and then doing no work to the old Victorian block. After a legal battle, the judge awarded the leasehold to the tenants who formed a management group.

So in summary:

1) Find out who owns the lease.
2) Find out how much ground rent & service charges are (this really caught me out when I bought).
3) The state of the building fabric and any major work that is going to be required - again the block was knackered and I had to fork out around £500 year for major repairs that are probably still ongoing to this day.
 

londonblue

Topgun Pilot
Joined
Feb 18, 2004
Messages
16,526
My son is looking to buy a flat which has 121 year left. Being somewhat old school, I am not completely sure about buying a leased property. Who owns the lease? What happens if they go skint? I would prefer him to buy a freehold property.
Pros and cons anyone?

It's unlikely you'll get a flat with a freehold. So to do what you would prefer he'll have to buy a house. I owned a flat before I bought my first house, which was leasehold. It didn't cause any issues at all. 121 years is plenty, most are usually around 100 or less IIRC.

As others have said, the service charge was paid to the freeholder, who employed a company to maintain the block. For the most part, the company behaved themselves, and did decorate on a semi-regular basis. They also did the communal repairs, even if they were slower than I would have done myself.

On the whole it worked pretty well. I have heard, though, that these days companies are more bothered about making money, and therefore do the work they are supposed to do on the cheap. I guess just like everything else, there's good and bad.

I would advise you/your son have a look round the block. If they seem well repaired and decorated then you have a level of confidence that they're looked after. It's also worth asking how often the block is decorated. Not how often they are supposed to decorate, but how often they actually decorate.
 

steveo

mine to stay the same please
Joined
Aug 30, 2005
Messages
7,545
Thanks chaps. Shrimperzone - real advice from people with real life experience - You cant beat it.
 

OldBlueLady

Junior Blues Coordinator⭐
Joined
Dec 27, 2007
Messages
48,326
Location
Benfleet
Just as a comment on the leasehold, flats are harder to sell on if the lease is below 100 years in the current economic climate and in our area.
 

Pubey

Guest
Don't just find out the ground rent, but also the rules and assurances about how much these can increase by each year.

I've heard tales about leasehold landlords making a fortune from charging ridiculous legal/admin costs for any dispute, so be wary of that. I guess it's like anything, 99% of the time it'll be fine but every now and again it'll be a nightmare.

DTS would be a good person to chat to about this but I guess he's spending a lot of time getting up to naughty shenanigans being a quiet mature family man.
 

mrsblue

Banned
Joined
Oct 15, 2012
Messages
9,419
My son is looking to buy a flat which has 121 year left. Being somewhat old school, I am not completely sure about buying a leased property. Who owns the lease? What happens if they go skint? I would prefer him to buy a freehold property.
Pros and cons anyone?


Freehold without a doubt .

Leasehold is one big minefield,service charges can be eye watering!
 

Yorkshire Blue

Super Moderator⭐
Staff member
Joined
Oct 27, 2003
Messages
36,631
Location
London
My son is looking to buy a flat which has 121 year left. Being somewhat old school, I am not completely sure about buying a leased property. Who owns the lease? What happens if they go skint? I would prefer him to buy a freehold property.
Pros and cons anyone?

Leasehold is generally fine - all flats will basically be leasehold as you need someone (ie the landlord) to be responsible for maintaining the structure and the common parts, insuring the building etc on behalf of everyone who lives there. The landlord does that and then charges this back from the leaseholders via the service charge. You have less control but also less hassle.

Sometimes they'll grant a long lease of the entire building to a landlord and then pass the freehold to a management company owned by all the leaseholders to look after. I think when the landlord sells they've got to offer the freehold to the leaseholders as well, but I don't know the ins and outs of this.

I'd suggest you make sure you/he gets a copy of the service charge accounts. If it's a new build/conversion they'll depress the service charge for the first couple of years to make it more sellable - in which case budget for it to go up 25%-50% by years 3 or 4. The service charge will seem like a lot but it often absorbs a lot of outgoings that you'll pay and forget about as a house-owner (buildings insurance, boiler repair, fixing the guttering, sorting the garden out, a burglar alarm, painting the outside) that add up. If there's a lift (probably not in Rayleigh High Street) that always bumps up the Service Charge.

On the plus side a lot of your costs are aggregated which allows you to get economies of scale (assuming it's not just a two flat place), flats can be ridiculously well insulated - I haven't had to put on my heating for a couple of years now and you don't have any stairs to hoover.
 

OldBlueLady

Junior Blues Coordinator⭐
Joined
Dec 27, 2007
Messages
48,326
Location
Benfleet
Just as a for instance, I've listed a flat at work today that's got a 112 year lease and combined ground rent and maintenance charges of £47 per calendar month. That's pretty good compared to some.
 

rigsby

Life President⭐
Joined
Oct 12, 2014
Messages
14,594
Go for the best flat, rather than if its freehold or leasehold. Rayleigh has a shortage of flats compared to other parts of Essex. It will be easy to sell or rent if his circumstances change in a few years. He won't have to worry about a lease for 30 years. Most banks get a bit nervous with about 85 left and won't lend under 70. You can of course extend a lease but the lower the amount of years left the more it will cost.

Everybody will have a tale of woe when it comes to flats, but you wont hear the other nine success stories. If you really don't like the landlord you do have a right to by the freehold if 50% or more of the leaseholders agree.(check my info as it is may be out of date).

Rayleigh High street will be a great slot for his first shag pad. You might as well come back to mine girls and ring the cab from there, will prove to be priceless over the years. Even for a young man the golden 3 rules apply...... location, location, location.:winking:
 
Joined
Jan 24, 2007
Messages
2,377
Location
leigh on sea
you can buy the freehold if all leaseholders agree (and pay their share). The Freeholder has to do this and the amount the leaseholder pays relates to a formula. My sister had sharks for Freeholders and saved a fortune by buying the freehold. It'll all be on line. I think it was something like the Leasehold reform Act.
 

The Big Shrimp

Zone Photographer
Joined
Aug 26, 2006
Messages
5,752
Beware of certain freeholders. Some companies are notoriously bad and rip off merchants.

I had a flat for nearly 24 years and were regularly raped by the freeholder and their agents. Fortunately, we were able to buy the freehold and life was easier.

Make sure you know your lease inside out and the law. An example, you are allowed to get your own quotes for repairs, insurance etc. It's sounds scary, but it needn't be. Buy the wrong block and can be a nightmare.

In short, do your homework and find out who owns the freehold.
 
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