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Leasehold, Is It A Major Problem On A Flat

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Hiya everyone, i am thinking about buying a flat just for the purpose of renting out, but i notice they are all nearly leasehold, would it deter people when i eventually sell it on in a few years time? i am probably going to keep it for two or three years

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Flats are usually leasehold as more than one property is on the same patch of ground.  It’s only a problem if the lease is too short or if the ground rent can be increased substantially  by the freeholder.    Also make sure you know what the service charges are, and what fees the Management Company charge every time you need permission for something (e.g change of tenant), need a copy of a document (e.g. to buy/sell the flat) etc.  These can be surprisingly high.  Read the lease carefully.

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5 hours ago, ttparsons said:

Flats are usually leasehold as more than one property is on the same patch of ground.  It’s only a problem if the lease is too short or if the ground rent can be increased substantially  by the freeholder.    Also make sure you know what the service charges are, and what fees the Management Company charge every time you need permission for something (e.g change of tenant), need a copy of a document (e.g. to buy/sell the flat) etc.  These can be surprisingly high.  Read the lease carefully.

Thanks ttparsons, i will have a look at that, hopefully the seller should be able to tell me most of this before any purchase gets to the solicitor

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Er, no. Do not rely overmuch on what the vendor tells you (other than re the financial details of outgoings).

After all, V just wants to sell.

Instead, take clear legal advice from your solicitor.

In particular, ask him/her to what extent the lease restricts or limits your power to sublet; many flats' leases do.

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2 hours ago, Jeffrey Shaw said:

Er, no. Do not rely overmuch on what the vendor tells you (other than re the financial details of outgoings).

After all, V just wants to sell.

Instead, take clear legal advice from your solicitor.

In particular, ask him/her to what extent the lease restricts or limits your power to sublet; many flats' leases do.

Thanks Jefferey..

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In England  & W ales , flats are usually sold under leasehold title because mortgage lenders require the flat to be under a maintenance  agreement which is satisfied by  a   99 year  or 125 years  lease.     Most mortgage lenders will not offer mortgages on leases fallen   below 70 years  and  seeking   statutory  90 years   lease extension at below 80 years  incurs higher cost  due  to  inclusion  of   50% of the marriage value .

 

https://www.lease-advice.org/advice-guide/lease-extension-valuation/

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7 minutes ago, topflat29 said:

In England  & W ales , flats are usually sold under leasehold title because mortgage lenders require the flat to be under a maintenance  agreement which is satisfied by  a   99 year  or 125 years  lease.     Most mortgage lenders will not offer mortgages on leases fallen   below 70 years  and  seeking   statutory  90 years   lease extension at below 80 years  incurs higher cost  due  to  inclusion  of   50% of the marriage value .

 

https://www.lease-advice.org/advice-guide/lease-extension-valuation/

Thanks, I will check that link out tonight

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