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A friend wants to sell an upstairs flat, but it is unmortgageable because the lease period has dropped below seventy "n" years.

The detail escapes me.

He tells me a lease extension to 99 years can be negotiated with the freeholder, but with or without agreement the legal costs of both parties must be paid by the leaseholder. Who would put their head into that lions mouth?

The ground floor flat is also leasehold on the same period, and apparently the leaseholders together are legally entitled to buy out the freehold, presumably valued according to some formula.

Does anyone know what this formula is?

The ground rent is £35pa.

A management fee of £1000pa is extracted by lawyers, (who I am told do not happen to be the freeholders) for collecting that rent and little else.

I think a non-discretionary bill for maintenance must also be paid.

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A friend wants to sell an upstairs flat, but it is unmortgageable because the lease period has dropped below seventy "n" years.

The detail escapes me.

He tells me a lease extension to 99 years can be negotiated with the freeholder, but with or without agreement the legal costs of both parties must be paid by the leaseholder. Who would put their head into that lions mouth?

The ground floor flat is also leasehold on the same period, and apparently the leaseholders together are legally entitled to buy out the freehold, presumably valued according to some formula.

Does anyone know what this formula is?

The ground rent is £35pa.

A management fee of £1000pa is extracted by lawyers, (who I am told do not happen to be the freeholders) for collecting that rent and little else.

I think a non-discretionary bill for maintenance must also be paid.

Does this help?

http://www.extendthelease.com/

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More specific now.

Without getting gouged by HMSO for incomplete information,

can anyone suggest where i might find Schedules 6 and 13 of the Leasehold Reform, Housing and Urban Development Act 1993?

Thanks

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Never, ever, ever touch a leasehold flat with a barge pole.

I grew up in a ground-floor maisonette following my parents' divorce, with the ground landlord living in the flat above. She cynically used the leasehold system to extort money out of my mother: basically, to blackmail her into paying for upgrades to the LL's flat by claiming, fallaciously, that it was for communal building fabric repairs. The LL's son was a rich banker who arranged for threatening lawyers' letters to be sent to Mother whenever she raised any objection. The lease had all sorts of restrictive conditions in it (no pets, no movements in and out of the flat and all lights to be extinguished by 11pm, no planting anything in the garden without the LL's permission, etc. etc.), which the ground LL enforced ruthlessly. She refused to extend the lease when Mother eventually sold and left. And nothing whatsoever could be done about this, because the law says that if the ground LL lives in the same building as the lessee (even if she moves in after you did), you can't buy the freehold, force the ground LL to extend the lease or even challenge the provisions of the lease.

I am quite simply never going to buy a leasehold property: I'd prefer to rent than do that, because at least under an AST you can walk away with limited losses as a last resort. Based on my experience as a child and teenager growing up in a leasehold property, I would advise anyone not to buy one under any circumstances whatsoever.

Edited by The Ayatollah Buggeri

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Never, ever, ever touch a leasehold flat with a barge pole.

I grew up in a ground-floor maisonette following my parents' divorce, with the ground landlord living in the flat above. She cynically used the leasehold system to extort money out of my mother: basically, to blackmail her into paying for upgrades to the LL's flat by claiming, fallaciously, that it was for communal building fabric repairs. The LL's son was a rich banker who arranged for threatening lawyers' letters to be sent to Mother whenever she raised any objection. The lease had all sorts of restrictive conditions in it (no pets, no movements in and out of the flat and all lights to be extinguished by 11pm, no planting anything in the garden without the LL's permission, etc. etc.), which the ground LL enforced ruthlessly. She refused to extend the lease when Mother eventually sold and left. And nothing whatsoever could be done about this, because the law says that if the ground LL lives in the same building as the lessee (even if she moves in after you did), you can't buy the freehold, force the ground LL to extend the lease or even challenge the provisions of the lease.

I am quite simply never going to buy a leasehold property: I'd prefer to rent than do that, because at least under an AST you can walk away with limited losses as a last resort. Based on my experience as a child and teenager growing up in a leasehold property, I would advise anyone not to buy one under any circumstances whatsoever.

From the little I know I think you are absolutely right Ayatollah, why are we not warned against this tool of extortion as small children?

My limited exposure to this is having once mortgaged a Northern Ireland ex-housing association terrace that was on a 999 year lease from one of the Lords of Antrim. The groundrent was one peppercorn, which I seem to remember resolved to a tenner and I don't remember ever paying it.

I had always regarded the leasehold system as a feudal relic that was fairly benign in gently extracting small amounts from many in perpetuity by a cowed aristocracy. I see now it can be used as a vicious hand to the throat.

Edited by Laughing Gnome

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That's brilliant Freeholder, thanks.

I had no idea that such information could be obtained for free officially. I had assumed one would be gouged for it, rather like attempting to obtain a standard from the British Standards Institution. Thanks for wiseing me up.

Gotta read the feckin thing now :(

Edited by Laughing Gnome

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That's brilliant Freeholder, thanks.

I had no idea that such information could be obtained for free officially. I had assumed one would be gouged for it, rather like attempting to obtain a standard from the British Standards Institution. Thanks for wiseing me up.

Gotta read the feckin thing now :(

Always the hard part.

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A friend wants to sell an upstairs flat, but it is unmortgageable because the lease period has dropped below seventy "n" years.

The detail escapes me.

He tells me a lease extension to 99 years can be negotiated with the freeholder, but with or without agreement the legal costs of both parties must be paid by the leaseholder. Who would put their head into that lions mouth?

The ground floor flat is also leasehold on the same period, and apparently the leaseholders together are legally entitled to buy out the freehold, presumably valued according to some formula.

Does anyone know what this formula is?

The ground rent is £35pa.

A management fee of £1000pa is extracted by lawyers, (who I am told do not happen to be the freeholders) for collecting that rent and little else.

I think a non-discretionary bill for maintenance must also be paid.

If your friend goes for a statutory leasehold extension, he can add a further 90 years to the lease and reduce the ground rent to one pence a year. There is a free lease extension calculator at www.leaseholdextensionvaluation.com

Lease Extension Calculator

The cost should be pretty much the same for freehold purchase on a per flat basis.

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If your friend goes for a statutory leasehold extension, he can add a further 90 years to the lease and reduce the ground rent to one pence a year. There is a free lease extension calculator at www.leaseholdextensionvaluation.com

Lease Extension Calculator

The cost should be pretty much the same for freehold purchase on a per flat basis.

Thanks for that, straighforward & no charge.

I am inclined to think buying out the lease entirely would be a better option but I have to read all the guff.

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Never, ever, ever touch a leasehold flat with a barge pole.

I grew up in a ground-floor maisonette following my parents' divorce, with the ground landlord living in the flat above. She cynically used the leasehold system to extort money out of my mother: basically, to blackmail her into paying for upgrades to the LL's flat by claiming, fallaciously, that it was for communal building fabric repairs. The LL's son was a rich banker who arranged for threatening lawyers' letters to be sent to Mother whenever she raised any objection. The lease had all sorts of restrictive conditions in it (no pets, no movements in and out of the flat and all lights to be extinguished by 11pm, no planting anything in the garden without the LL's permission, etc. etc.), which the ground LL enforced ruthlessly. She refused to extend the lease when Mother eventually sold and left. And nothing whatsoever could be done about this, because the law says that if the ground LL lives in the same building as the lessee (even if she moves in after you did), you can't buy the freehold, force the ground LL to extend the lease or even challenge the provisions of the lease.

I am quite simply never going to buy a leasehold property: I'd prefer to rent than do that, because at least under an AST you can walk away with limited losses as a last resort. Based on my experience as a child and teenager growing up in a leasehold property, I would advise anyone not to buy one under any circumstances whatsoever.

+1

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Never, ever, ever touch a leasehold flat with a barge pole.

Have heard similar nightmares, not sure how common they are, but if something can go wrong...

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Never, ever, ever touch a leasehold flat with a barge pole.

I grew up in a ground-floor maisonette following my parents' divorce, with the ground landlord living in the flat above. She cynically used the leasehold system to extort money out of my mother: basically, to blackmail her into paying for upgrades to the LL's flat by claiming, fallaciously, that it was for communal building fabric repairs. The LL's son was a rich banker who arranged for threatening lawyers' letters to be sent to Mother whenever she raised any objection. The lease had all sorts of restrictive conditions in it (no pets, no movements in and out of the flat and all lights to be extinguished by 11pm, no planting anything in the garden without the LL's permission, etc. etc.), which the ground LL enforced ruthlessly. She refused to extend the lease when Mother eventually sold and left. And nothing whatsoever could be done about this, because the law says that if the ground LL lives in the same building as the lessee (even if she moves in after you did), you can't buy the freehold, force the ground LL to extend the lease or even challenge the provisions of the lease.

I am quite simply never going to buy a leasehold property: I'd prefer to rent than do that, because at least under an AST you can walk away with limited losses as a last resort. Based on my experience as a child and teenager growing up in a leasehold property, I would advise anyone not to buy one under any circumstances whatsoever.

On the other hand, freehold flats can also be a nightmare in trying to enforce e.g. repairs to roof/ guttering etc as their isn't an ultimate freeholder to do the enforcing. I'd just say Never buy a flat - rent untill you can get a freehold house.

I suppose there might be an exception for some conservation area type estates where the houses are on 999 year leases, and there is a freeholder to enforce some degree of conformity - would stop people deciding to put pink stone cladding over the front of a house on Bath's Royal Crescent, for example!

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A friend wants to sell an upstairs flat, but it is unmortgageable because the lease period has dropped below seventy "n" years.

The detail escapes me.

Flats with leases below 70 "n" years can be mortgaged, it is just a bit more difficult to find one.

Management charges have to audited and can be challenged if they don't follow the rules. You can't be charged for "collecting the rent"

tim

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On the other hand, freehold flats can also be a nightmare in trying to enforce e.g. repairs to roof/ guttering etc as their isn't an ultimate freeholder to do the enforcing. I'd just say Never buy a flat - rent untill you can get a freehold house.

I think a lot of it depends on the individual building - a leasehold flat with a well written lease (and without the LL living there!) would be preferable to trying to organise repairs in a shared freehold black with 50 flats in it. Both leave you open to problems, though.

I have known a lot of people who have lived in leasehold flats and I don't recall any of them mentioning problems like this, but it is a big risk.

On the other side of the coin, you do get a discount for buying leasehold. Around here, you can buy a good sized 2 bed leasehold flat for £350k or hold out for a similar sized terraced house for £500k. Sure some of that difference is for not having someone else living above or below you, but some is for the extra security of the freehold tenure.

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the law says that if the ground LL lives in the same building as the lessee (even if she moves in after you did), you can't buy the freehold, force the ground LL to extend the lease or even challenge the provisions of the lease.

This is incorrect.

That inabilty to buy the freehold only applies if the building is a conversion into four or fewer flats and not a purpose-built block and the same person has owned the freehold since before the conversion of the building into flats and he or an adult member of his family has lived there for the past 12 months.

If it did apply you can still claim a statutory lease extentsion

I do wish people took a little time and effort before making bold statements about the law

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This is incorrect.

That inabilty to buy the freehold only applies if the building is a conversion into four or fewer flats and not a purpose-built block and the same person has owned the freehold since before the conversion of the building into flats and he or an adult member of his family has lived there for the past 12 months.

If it did apply you can still claim a statutory lease extentsion

I do wish people took a little time and effort before making bold statements about the law

+1

I went to hassle of buying (and reading) a whole book on the leasehold system after reading such scares stories.

Freehold is preferable to leasehold but you do have the right to extend and at a price set by an independent value which should be line with the uplift in value you get from extending. The ones I would avoid are modern flats in large blocks which have outrageous service charges for lots of services such as porterage, communal gardening, lifts etc.

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On the other hand, freehold flats can also be a nightmare in trying to enforce e.g. repairs to roof/ guttering etc as their isn't an ultimate freeholder to do the enforcing. I'd just say Never buy a flat - rent untill you can get a freehold house.

I suppose there might be an exception for some conservation area type estates where the houses are on 999 year leases, and there is a freeholder to enforce some degree of conformity - would stop people deciding to put pink stone cladding over the front of a house on Bath's Royal Crescent, for example!

Major contradiction or lack of understanding alert !!!

If you have a freehold flat, as I do, then you are the daddy! You make all the maintenance decisions. Period.

Freehold flat owner responsibilities = freeholder responsibilities for a whole house.

Freeholder flat liabilities, I.e. Who has to pay, is usually shared. The proportions will be defined in the leases.

The key point of this thread is to be very weary about short leases. As the remaining period of the lease tends towards zero, so does the value of the flat. Yes, you can extend the lease but for resale purposes you can expect to be considered unmortgagable by some lenders if the lease drops to less than 80 years remaining. Costs of extending will vary from under £10k to, er, well, the entire value of the flat, if you let the lease diminish to zero. That is the very nature of a lease!

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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