Leasehold/ Freehold

Hi

Does a house being leasehold devalue the house?

I remember a couple of years ago finding out a house i liked was leasehold, it put me off and i swore i would only buy freehold. So now im about to buy a house which the owner thought was freehold i told them to double check with their solicitor and get back to me. So i find out its leasehold, as i want the house and things are moving quickly i am going to put up with it and carry on. But i feel like its worth less, in the future when i want to sell it i think people may be put off.

I dont know all the info yet, like ground rent and length of the lease but im assured its very long and very cheap per year. Obviously their may be other restrictions, so im waiting for the documents so i can read through it.

Thoughts?

It would de-value the house in my eyes I have to say. We bought our current house, which was originally leasehold. But the previous owners bought the freehold.

If they hadn't and the house was still leasehold, I would have at the very least put the brakes on the process until I found out if the lease was purchaseable. And if so, I'd expect a reduction in the price to reflect this and an indemnity insurance policy to guarentee that the leaseholder would sell the freehold to me.

If that had not been forthcoming, it would probably be a deal breaker for me.

How much did the lease cost to buy?

How much did the lease cost to buy?

Sorry, I don't know. They'd bought it some years before we bought the house from them.

Many of the houses in Sheffield are leasehold. Generally if the house is fairly old then the lease will be long and very cheap. Our house has 900 years left to run (originally 999) and is £6.30 a year. We could buy the freehold as we have owned the house for more than 10 years but its not really worth it as we would have to pay solicitor fees etc. If the lease reads ok and the rent is cheap I wouldn't let it worry you. It certainly doesn't affect the value.

Many of the houses in Sheffield are leasehold. Generally if the house is fairly old then the lease will be long and very cheap. Our house has 900 years left to run (originally 999) and is £6.30 a year. We could buy the freehold as we have owned the house for more than 10 years but its not really worth it as we would have to pay solicitor fees etc. If the lease reads ok and the rent is cheap I wouldn't let it worry you. It certainly doesn't affect the value.

Leasehold isn't necessarily a problem as such, but I would argue it does affect the value.

I would not pay the same for a house which is leashold, but otherwise identical to the freehold property next door.

Thats good to know!

The lease is long like yours and the ground rent is also very cheap so its alot better than a shorter lease of say 100yrs that could be more off putting for the next buyer.

Quite often the low ground rents are uneconomical to collect and the freeholds are sold off to unscruluous companies engaging in making extortionate demands on leaseholders such as 200 pds consent fee for changing your mortgage lender.

So be aware that " leasehold system" is not good for the home buyer.

Just take a look at the retirement home problem at http://www.carlex.org.uk

Do you pay annual ground rent to E&M ?

Leasehold or freehold shouldn't make a lot of difference to value. As others have said leasehold houses are common in Sheffield although rare in most other parts of the country. This could mean that people relocating to Sheffield from another part of the country might be put off buying leasehold, but any one who's been here a while should be comfortable.

My dad recently bought the freehold to his house from the council. It wasn't a council house but the council owned the land to his house and the neighbours. I think it cost about £1,000 plus a few hundred more in legal fees. Wasn't really necessary but as the council wanted to sell he was worried a dodgy landlord might buy the freehold and cause problems.

It can be a problem if you can't find out who owns the freehold as mortgage companies can insist that you take out insurance to cover unpaid ground rent. It can also be an issue if your lease runs out in less than about 60 years as it might not be possible to get a mortgage. As has been said its possible to renew the lease but that's going to be a hassle and cost..

I recently sold my house which was a leasehold, our house sold in less than 3 months and in that time we had plenty of people round to view it so don't think it's a huge point. However I would say our house had over 800 years on the lease left to run and cost something in the region of £1.90 a quarter- I understand if there is only a short lease on a property it can cause upset when being sold as lenders will only give mortgages on properties with over approx 99 years left to run. I know some friends who had agreed a sale, put a deposit down on a new house only to find due to having 70 yrs left on their lease their buyer's lender would not proceed unless they bought the freehold or had the lease extended. They extended the lease which held the conveyancing up by 5 months and cost nearly £1000.

I think it depends on the length of the lease that's left, the ground rent, and the cost of buying the freehold. Our house has 600 years left on the lease, the ground rent is £2.00 a year, and the freehold would cost us £1500. So, being leasehold didn't put me off or devalue the property for me, the devaluing was due to the condition of the house more than anything...

I think it depends on the length of the lease that's left, the ground rent, and the cost of buying the freehold. Our house has 600 years left on the lease, the ground rent is £2.00 a year, and the freehold would cost us £1500. So, being leasehold didn't put me off or devalue the property for me, the devaluing was due to the condition of the house more than anything...

Generally the lease is not a problem and as little impact on the valuation but it needs to be checked by the solicitor, had one recently where there was a stipulation that the property could not be let.