Put simply, buying a leasehold will mean that whilst you may well own the property, the land it is sitting on remains the ownership of the freeholding landlord.
With the BBC highlighting the issues surrounding the purchase of leasehold property, here are six important considerations before going ahead with the leasehold purchase.
How much is the ground rent?
Some landlords will charge a nominal ground rent, whereas others may stipulate amounts stretching into quadruple figures. What is often an overlooked or a secondary consideration by buyers has become an important aspect in any discussion to purchase a leasehold property.
Establish how long the leasehold is for
Terms offered by landlords differ; however, mortgage providers generally insist on a minimum term of 20 years, so it is important to check there are enough years remaining on the lease. In some cases, you may have to negotiate with the landlord to get the lease you need. A regulated conveyancing solicitor such as https://www.samconveyancing.co.uk/Conveyancing-Solicitors/Conveyancing-Solicitors-London will ensure you are aware of your options beforehand.
Service charges can be as varied as there are types of landlord. These would typically include cleaning, gardening, repairs and even decoration. Negotiation and checking the detail are key before signing on the dotted line.
Sales and information packs, notices of charge fees and notices of transfer fees are all examples of hidden charges that are often not factored in at the outset. Agreeing with your landlord exactly what extra charges will be incurred will save any costly surprises later.
Leasehold property restrictions
With landlords able to take action against restrictions not being observed, it is important that you agree with them beforehand. Restrictions range from redecoration to the prohibition of pets and business conducted at the property, to name just a few. Again, there can be as many variations as there are types of landlord.
Unreasonable ground rent increases
With the recent surge in new-build leasehold properties, the sheer number containing unreasonable ground rent increases during the lifetime of the lease has been challenged by the government. With conveyancing solicitors London based or anywhere across the UK’s booming construction industry having to remain vigilant, it is important to check.
Following these six principles will go a long way towards getting the right leasehold deal for you.