Time to raise the rents. Posted August 21, 2005 Share Posted August 21, 2005 I was just thinking to myself the other day, that the leashold system actually increases the chance of large price falls on flats & other properties sold on leases. Imagine that a person who bought a flat say 5 to 10 years ago with 75 years remaining on the lease. They've made a good CG, it's obviously going to be on their mind that their lease is diminishing and that they should sell before it diminishes further. Just another reason to only buy freehold or share of the freehold places IMO. But this need to trade out of the lease, might add to the perception of prices falling. Because yes, in fact, the price of the lease should at least fall in real terms over the life of the lease. But that has nothing to do with the market in general. Quote Link to comment Share on other sites More sharing options...
FreeFall Posted August 21, 2005 Share Posted August 21, 2005 I thought there was a recent mandate from the government that everyone who has lived in a property for more than 2 years had a legal right to re-negotiate the lease? Admittedly it will incur a fairly substantial cost (last one I looked at was 17k for a 125 year lease), but can't see it being too much of an issue especially if that's the only reason for moving? Quote Link to comment Share on other sites More sharing options...
200p Posted August 21, 2005 Share Posted August 21, 2005 Who are the freeholders of blocks of flats and apartments???? They must be very rich companies or individuals who can sit around, organise maintenance, collect ground rent, and collect money for extending leases........ Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted August 21, 2005 Share Posted August 21, 2005 I was just thinking to myself the other day, that the leashold system actually increases the chance of large price falls on flats & other properties sold on leases.Imagine that a person who bought a flat say 5 to 10 years ago with 75 years remaining on the lease. They've made a good CG, it's obviously going to be on their mind that their lease is diminishing and that they should sell before it diminishes further. Just another reason to only buy freehold or share of the freehold places IMO. But this need to trade out of the lease, might add to the perception of prices falling. Because yes, in fact, the price of the lease should at least fall in real terms over the life of the lease. But that has nothing to do with the market in general. <{POST_SNAPBACK}> They changed the law on this a bit for owner occupiers about two years back (if it comes up you have a right to renegotiate), but it hasn't really changed the perception, and it still restricts the amount that can be borrowed on short leases, since the market relies to big extent not on owner occupiers but on BTLs who have no such rights. Quote Link to comment Share on other sites More sharing options...
Red Baron Posted August 21, 2005 Share Posted August 21, 2005 TTRTR Where can one get a table of leasehold values showing the decline in value over time? I cannot find anything on the internet. Thanks. Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted August 21, 2005 Author Share Posted August 21, 2005 I thought there was a recent mandate from the government that everyone who has lived in a property for more than 2 years had a legal right to re-negotiate the lease?Admittedly it will incur a fairly substantial cost (last one I looked at was 17k for a 125 year lease), but can't see it being too much of an issue especially if that's the only reason for moving? <{POST_SNAPBACK}> They changed the law on this a bit for owner occupiers about two years back (if it comes up you have a right to renegotiate), but it hasn't really changed the perception, and it still restricts the amount that can be borrowed on short leases, since the market relies to big extent not on owner occupiers but on BTLs who have no such rights.<{POST_SNAPBACK}> Yes laws have been changing, but all that's changed is that people have been given the right to purchase an extension to their lease in certain cirumstances. A 30 year extension on a 50 year lease can cost well over 30 or 40 thousand on a small FTB price range flat. So the diminishing value rule hasn't changed, but the ability of a freeholder to refuse to renew or extend has changed in certain circumstances, for example when the freeholder doesn't live at the address, the lose some of their previous rights. Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted August 21, 2005 Author Share Posted August 21, 2005 TTRTRWhere can one get a table of leasehold values showing the decline in value over time? I cannot find anything on the internet. Thanks. <{POST_SNAPBACK}> I don't know, but as far as I'm aware, the shorter a lease becomes, the more the value of it tends to come closer to the discounted cashflow model based on rents in the local area. Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted August 21, 2005 Author Share Posted August 21, 2005 Who are the freeholders of blocks of flats and apartments????They must be very rich companies or individuals who can sit around, organise maintenance, collect ground rent, and collect money for extending leases........ <{POST_SNAPBACK}> A license to print money, but a long wait between printing runs unless a large portfolio of freeholds is owned. Quote Link to comment Share on other sites More sharing options...
Take me to the cleaners Posted August 21, 2005 Share Posted August 21, 2005 http://england.shelter.org.uk/advice/search.cfm Everything you need to know about leasehold. Renting is just another form of leasehold - a short period rather than a long period. Leasehold you just pay a significant amount of money to "own" the interior of the flat for a fixed period of time. When I worked in Camden I used to see many older persons (usually women) who had real problems with their landlords, usually over service charges. Worse than neighbour disputes..... Quote Link to comment Share on other sites More sharing options...
Matt Posted August 21, 2005 Share Posted August 21, 2005 What TTRTR is trying to say with this thread is..... ...leasehold flats will see a huge price crash but freehold ones will not. Er...I don't think so you great tw@t Quote Link to comment Share on other sites More sharing options...
Rain'ard Posted August 22, 2005 Share Posted August 22, 2005 I look after 80 leasehold flats, with about 60 years life left on the lease. The freeholder charges £11000 to renew. So some tenants now advertise two prices £155,000 and £166,000. I suppose this gives cash buyers a choice to renew and borrowers a realistic(sic) price before they approach a lender. I know several on the market at this time and neither are selling, bar one where the seller accepted the same price he paid 2 years ago £153,000 fully renovated. TTRTR is right it does make prices look cheaper and falling, but it also has the effect of making the renewed leased ones dearer. Both becoming more to difficult to sell. He also says about buying freehold, IMO I think that’s true, stay away from leasehold, common hold or any other hold, it’s just rent up front with all the expense and lack of mobility. Quote Link to comment Share on other sites More sharing options...
M31 Posted August 22, 2005 Share Posted August 22, 2005 Eh? I run the block of flats in which I live. If you have share of the Freehold the the renewal of your lease should be done at cost in most cases. I don’t think cost should be more that £1000 at the most. Then again solicitors can charge the earth. Management of the block can be by those living in the block (ie. Free) or by an agent who the majority in the block agree should run the block on your behalf (about £10 per month each + 10% on all major repair works). Quote Link to comment Share on other sites More sharing options...
200p Posted August 22, 2005 Share Posted August 22, 2005 (edited) He also says about buying freehold, IMO I think that’s true, stay away from leasehold, common hold or any other hold, it’s just rent up front with all the expense and lack of mobility.<{POST_SNAPBACK}> I cant agree more! Please dont assume houses are freehold either just becuase they look like they sit on their own land. Theres a terraced HOUSE that was opposite us selling for 110K which is LEASEHOLD! This is nearly the same price as other freehold properties in the road. We checked by asking the agent. The forsale sign has now come down now, but I was worried that a nieave FTB buyer may buy it and be lumbered. Please, please do check with your solicitor and agent whether it is freehold and leasehold when you eventually buy folks (on houses). Edited August 22, 2005 by trev Quote Link to comment Share on other sites More sharing options...
CrashIsUnderWay Posted August 22, 2005 Share Posted August 22, 2005 C'mon guys, agree with the little swedeboner for once. After all, he's obviously sh1ttingbrix. Why the h£ll would he come on here and post this tripe except to try and find some kind of support for his last remaining hope (that although property prices will crash, it will only be LEASEHOLD properties, because TTRTR only owns freehold properties). That's right, TTRTR, your little empire is quite safe. The rest of Wandsworth will crash 30% or 40% over the next 2.5 years, EXCEPT for freehold terraced houses, rented out by absentee Australian Landlords who reside in Sweden and like herring. Guranteed. Sucker. Quote Link to comment Share on other sites More sharing options...
200p Posted August 22, 2005 Share Posted August 22, 2005 LOL A crash on leashold properties wont happen in isolation - most of the lay public dont know the difference. That is why the price difference between a leasehold flat and a freehold house is small. Quote Link to comment Share on other sites More sharing options...
M31 Posted August 22, 2005 Share Posted August 22, 2005 Like I said leasehold can be a problem but it depends who owns the freehold. If you do (as in my block) then it’s not a problem. The reason why most flats are leased is enable everyone to be tied together legally so that the block can be run. Quote Link to comment Share on other sites More sharing options...
Tron Posted August 22, 2005 Share Posted August 22, 2005 In my block the owners have a share of the freehold and look after the whole place's finances. Renenwing the lease to 999 years costs less than £500. I know several people who have done this in the last few years and the old days of leaseholders being held to ransom are disappearing (about time). Our leasehold system will eventually be like freehold, but you pay maintenance. Quote Link to comment Share on other sites More sharing options...
IMD Posted August 22, 2005 Share Posted August 22, 2005 Who are the freeholders of blocks of flats and apartments???? Our beloved (barf barf) royal family are one of the biggest interests - Phil the Greek owns a large part of London by virtue of his marrying a German who happens to be queen of England(?), and bunged him the duchy of Westminster (with a most profitable chunk of land in prime London in teh bargain). The sooner we disband the monarchy the better... Quote Link to comment Share on other sites More sharing options...
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