We want to buy a house at auction but have found out today the property is lease hold with 15 years remaining. The estate agent selling the house
says the vendors solicitors have served notice on the free holder but refused to explain what that meant, beyond saying the successful bidder at
auction will be able to negotiate with the freeholder.
What does serving notice do in this situation?
[Edited on 14-8-2015 by smart51]
The answers seem to be in here
http://www.leaseholdguidance.co.uk/lease_extension/step/2
Seems basically you can open informal negotiations, contact them, sort out a deal and it happens when it happens, say if you had 80 years left, others
no rush
Serving notice is a bit more formal, expecting things tho be done quick and withing certain timescales
Lenders typically won't give mortgages on properties with less that 100 years remaining, if I remember my 4 year sentence with rbs mortgages
right
Thanks for the link. It talks about flats but I assume the same rules apply to a house.
It seems bizarre to me that anyone would conceive of holding the freehold to a house and leasing it to someone else. Especially as the ground rent is
£9.00pa. Why on earth would you want to do that?
I've heard elsewhere that you're only entitled to buy the freehold after you've lived in the house for two years. Is this true? It
seems mad that we'd buy a house with a 15 year lease, hoping to extend the lease by 90 years, hoping further to buy the freehold after two years.
Well up in scotland we don't have any of that. No freehold or leasehold here
Rbs used to insist on the lease being extended before they'd lend, but customers would be referee to the solicitor to discuss that, presumably as
in current owners extend it, then add that to the purchase price. Didn't deal with legal stuff in my bit, just telling them the policy.
Speak to your solicitor before progressing. leasehold house sounds difficult. And I am not convinced a freeholder has to sell the freehold. They can
definitely charge a substantial amount to increase the lease (typically a flat here, selling at £150k with 25 years remaining is circa £25k to get a
full 99 year lease, when I asked recently, but no hard and fast rules)
You should be able to get a right to manage on the property if that is not already in place. But as to mortgage (you may or may not need one) that
could be difficult too.
Had a flat, the freeholder started to hold us to ransom on charges to maintain the building and insurance, half the money went to his solicitor to
request the cash!!!
We asked to buy the freehold, 85 years to run which he wanted £10,000 for in the end we got it for £3 (three flats) provided we paid fees.
My brother was in a larger split building, the freeholder owned a building company and in flat times sent his boys around to replace the roof, paint
the windows etc at a vastly inflated rate even if things did not require doing, he had to double his mortgage to keep up putting him into negative
equity.
Short free holds, sub £25 years have value, personally unless you can get the freehold with the property then go for it, otherwise look elsewhere,
alarms bells if the current owner has been discounted.
My cynical and very wary nature would prevent me from going too far with this house as a purchase.
I may be completely off base, things are probably all rosy and the birds are singing, but I would be very sceptical.
My scepticism over Leaseholds, unfounded though it may be, would prevent me from buying your house - if this is important to you (i.e. you feel you
may require to sell the place in the near foreseeable), then explore further. With a Freehold in your hands, I'd have no problem.
Wife and I were walking through Mayfair many years ago and, for a laugh, we looked in an estate agent's window. We saw a very nice apartment...
at around £2 million. With a 5-year lease.
Who, in their right mind, would spend that much money with that hanging over their head?
quote:
Originally posted by motorcycle_mayhem
My cynical and very wary nature would prevent me from going too far with this house as a purchase.
I may be completely off base, things are probably all rosy and the birds are singing, but I would be very sceptical.
My scepticism over Leaseholds, unfounded though it may be, would prevent me from buying your house - if this is important to you (i.e. you? feel you may require to sell the place in the near foreseeable), then explore further. With a Freehold in your hands, I'd have no problem.
quote:
Originally posted by David Jenkins
Wife and I were walking through Mayfair many years ago and, for a laugh, we looked in an estate agent's window. We saw a very nice apartment... at around £2 million. With a 5-year lease.
Who, in their right mind, would spend that much money with that hanging over their head?