#18 - Things to know about Leasehold Properties ReadytoBuyPodcast

Things to know about Leasehold properties!
Vikki Herbert, Solicitor and Partner at Thackray Williams Solicitors joins me today to discuss some key things you need to know if you’re considering buying a leasehold property
Vikki has over 20 years experience in her field and specialises in Leasehold Enfranchisement Matters and anything related to a residential lease
02:39-05:09
The difference between a freehold and leasehold property –
o  Freehold Property – you own both the land and the building. Most houses are freehold. There are some leasehold houses, although this is no longer allowed and new houses must be freehold
o  Leasehold Property – essentially a long-term let – you rent the building that sits on the land. Flats are leasehold.
05:10-05:27
Discussions around topical issues/considerations with leasehold properties
05:28-11:17
     Ground Rent - leaseholder pays the freeholder to rent the ground from them
o  This is a fixed rent that’s clearly set out in the terms of the lease
o  Increasing Ground Rents – lenders require that increases are reasonable i.e. broadly in line with inflation (Retail Price Index / RPI).
o  Good conveyancer/solicitor will check out the detail to ensure everything's in order
o  Try and get as much info on ground rent, service charge and the length of the lease upfront from the selling agent – it can be checked out
11:20-14:01
     Service charge
o  The charge paid to the freeholder or management company to maintain common/communal parts and structure of the building (roof, stairwell, gardens etc) and to provide buildings insurance for the whole building
o  It can change from year to year.
o  If buying a property, looking back at service charges from previous years can give a good indication of how costs may vary and what maintenance/works have been done.
o  Speaking to other leaseholders (flat owners) in the building may also give a good sense of how well the freeholder treats the leaseholders
o  Expensive Service Charges can be challenged as freeholders are obliged to charge “reasonable service charges”.
14:02-17:30
“DEFINITELY NOT A SILLY QUESTION” Feature
Q - Is it harder to get a mortgage on a flat near shops or commercial premises
A – Potentially yes, but it all depends on a number of factors: how close, what types of shop / commercial premises, what the local area is like. Essentially the lender wants to know how the proximity may affect the future saleability of the flat, which also has an impact on it’s value.
As we’ve said many times, all lenders have a slightly different approach to each other, some are more accommodating than others when it comes to this. You may also find that you’re required to put down more of a deposit than for a similar flat that isn’t close to commercial premises, which lowers the risk to the lender.
A Whole-of-Market Mortgage broker will be able to help you as they’ll understand the stance of lenders from across the market – so be able to quickly identify who may and may not be able to help.
REMEMBER:
1)    Always SEEK ADVICE for your own circumstances, and;
2)    A mortgage is a loan secured on your home and may be REPOSSESSED if you don’t keep up mortgage payments
17:32-20:37
     
Obtaining consent from freeholder / management company
Depending on the wording of...