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Should i buy this house

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hi2u_uk

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I have an offer on my current place so am scrambling around to find somewhere i want to purchase as i don't want to loose this buyer. I've already lost 2 buyers, one due to covid and the other cited apparent lack of progress on my part because at the time i hadn't found somewhere to move to .

The closest house of interest is one i saw in March 2020 . The reasons i discounted it at the time were

i ) It is a leasehold house - about 900 years on the lease with allegedly no service charge or ground rent according to the estate agent . It must be noted that at first the agent said it was a free hold house .

ii) You cannot get to the back of the house because the back of the house sits firmly against the garden wall of a house on a street behind the house . So if ever i needed to do something i would have to approach the owners of a house on another street to request access

It now seems this house has come back on the market

Would either of these issues put you off ? :frown:
 
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birchesgreen

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ii) Would annoy me but its not an insurmountable problem. I live in an end terrace but the side wall is basically in my neighbour's garden so if I ever need to do anything I have to ask. As long as you are on reasonable terms with your neighbour its no more than a minor annoyance.
 

Busaholic

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Both these issues should be resolved by the estate agent IN WRITING, especially the leasehold one which is absolutely crucial. Of course, any solicitor you instructed should get to the bottom of it, but that will take time and money which you may never recover should you decide not to proceed.
 

Gloster

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You really need to speak to your solicitor, who will advise you of the details of and possible problems with the leasehold arrangements. He or she could also advise you of any clauses that might allow or limit your access for repairs etc. to the rear of the property. I would always be suspicious of what an agent told me, especially if they can’t tell the difference between lease and freehold. Always get anything important from an agent etc. in writing.
 

Mcr Warrior

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A leasehold property will ALWAYS be subject to some annual ground rental amount, even if it's just a token 'peppercorn' amount, or isn't actively being collected by the freeholder or their agents.

Might not be an additional service charge, though.

One for your solicitor to thoroughly check.
 
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Gloster

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I once owned a flat that had a peppercorn rent: I did not have to pay anything, but it maintained the legality of it being a leasehold, rather than freehold, property. (Or so I understand.) It is a quite normal arrangement, at least in England.
 

hi2u_uk

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My research suggests its relatively simple to convert leasehold houses to freehold. Is this correct ?

I'm preparing myself for no access to the back wall of the house . I'd be surprised if the builders discussed this with the owners of the house on another street and got them to sign a contract stating that they would allow access but you never know. I do remember mentioning this to the estate agent last year and they agreed that there is no access to the back.

I have requested a viewing but obviously the buyer pulled out and it has occurred to me that one of these issues may be to blame
 

Gloster

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You can convert leasehold to freehold (in some cases you may have the right to do so), but it can be expensive. This applies to England and Wales, but probably not to Northern Ireland; I am not sure about Scotland.

Once again, get anything from an estate agent in writing. Did the builders need access via the other house in order to build the property?
 

hi2u_uk

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You can convert leasehold to freehold (in some cases you may have the right to do so), but it can be expensive. This applies to England and Wales, but probably not to Northern Ireland; I am not sure about Scotland.

Once again, get anything from an estate agent in writing. Did the builders need access via the other house in order to build the property?

This is an interesting question, it could be built without going through the back garden but if you did this then you wouldnt be able to see the external back wall of the house to make sure everything was being done ok. I assume some sort of checks were done but am not sure how they did this
 

DarloRich

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I have an offer on my current place so am scrambling around to find somewhere i want to purchase as i don't want to loose this buyer. I've already lost 2 buyers, one due to covid and the other cited apparent lack of progress on my part because at the time i hadn't found somewhere to move to .

The closest house of interest is one i saw in March 2020 . The reasons i discounted it at the time were

i ) It is a leasehold house - about 900 years on the lease with allegedly no service charge or ground rent according to the estate agent . It must be noted that at first the agent said it was a free hold house .

ii) You cannot get to the back of the house because the back of the house sits firmly against the garden wall of a house on a street behind the house . So if ever i needed to do something i would have to approach the owners of a house on another street to request access

It now seems this house has come back on the market

Would either of these issues put you off ? :frown:
Firstly is it a house or a flat? That makes a massive difference to the answer. I wouldn't buy a leasehold house. It is a minefield. I would buy a leasehold flat just as I wouldn't buy a freehold flat! There are loads of resources on the web about the issues with leasehold houses few of them telling a positive story.

The fact that there are leasehold houses drives me mad. It is unnecessary and unjustified for the freeholder to maintain ownership of the freehold.


Both these issues should be resolved by the estate agent IN WRITING,
This made me chuckle. That statement wouldn't be worth the paper it was written on. More fool you if you listen to anything an estate agent tells you. If they told you today was Monday i would double check.

Speak to your solicitor. Ignore the agent.

My research suggests its relatively simple to convert leasehold houses to freehold. Is this correct ?

You can convert leasehold to freehold (in some cases you may have the right to do so), but it can be expensive.
It is far from simple and far from cheap.
 

simonw

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Personally the lack of access to the back wall would make me walk away from buying it. Any problem with that wall, or presumably the roof that could not be fixed internally would leave you at the mercy of the other property owner. Unless there is an agreement to access your property from theirs I doubt they would grant it and even if there is an agreement you may still run into problems.

Your mortgage provider will also see it as a red flag.
 

DarloRich

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Personally the lack of access to the back wall would make me walk away from buying it. Any problem with that wall, or presumably the roof that could not be fixed internally would leave you at the mercy of the other property owner. Unless there is an agreement to access your property from theirs I doubt they would grant it and even if there is an agreement you may still run into problems.

Your mortgage provider will also see it as a red flag.


Compared to the leasehold issue rear access is a minor point. Houses are bought and sold all the time without rear access. I can see 2 from where i sit now. it is also important what is shown in the deeds as well as on the ground
 

Mcr Warrior

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Firstly is it a house or a flat? That makes a massive difference to the answer. I wouldn't buy a leasehold house. It is a minefield. I would buy a leasehold flat just as I wouldn't buy a freehold flat! There are loads of resources on the web about the issues with leasehold houses few of them telling a positive story.

The fact that there are leasehold houses drives me mad. It is unnecessary and unjustified for the freeholder to maintain ownership of the freehold.
Think the OP said it was a house.

Wouldn't have a major problem with a leasehold house if the lease was indeed 900 years unexpired, and the annual ground rent was for a small amount that didn't ever increase, say £5 per annum.

More recently built leasehold houses, where the ground rent doubles every year and soon rises to an astronomical sum of many hundreds or thousands of pounds a year, are something of a modern day scandal.

Similarly with paying unspecified escalating maintenance costs for some firm to "maintain" the local estate.

As @simonw has just re-emphasised a couple of posts ago, the biggest problem could be in adequately accessing all parts of the property.

Does depend on the nature of the property.

Don't rush into this without appropriate professional advice.
 

hi2u_uk

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OK i spoke to the estate agent and apparently the previous purchaser pulled out due to covid affecting their employment. She said that the developer has now made the house freehold. I will go view it again but im still worried about not being able to get round the back. If im ok i may make an offer and clearly instruct the solicitor not to proceed if it turns out to be a leasehold house ( yes its a house) though im now a bit worried about the council tax as it seems to be one band higher than other older local similar size properties just because its new
Personally the lack of access to the back wall would make me walk away from buying it. Any problem with that wall, or presumably the roof that could not be fixed internally would leave you at the mercy of the other property owner. Unless there is an agreement to access your property from theirs I doubt they would grant it and even if there is an agreement you may still run into problems.

Your mortgage provider will also see it as a red flag.
This is my worry, the owner is on a completely different street and may change
 

DarloRich

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Think the OP said it was a house.

Wouldn't have a major problem with a leasehold house if the lease was indeed 900 years unexpired, and the annual ground rent was a small amount that didn't ever increase, say £5.00 per annum.

More recently built leasehold houses, where the ground rent doubles every year and soon rises to an astronomical yearly sum, are something of a modern day scandal.
I would still have a problem with a leasehold house regardless of the term or the current situation in relation to ground rent/service charge etc. You have no control over who owns the freehold and how they operate their rights.

I would always check if it is a house,a flat, a flat in a house, part of a house, a new build appartment etc. Each have their own issues.

I will go view it again but im still worried about not being able to get round the back. If im ok i may make an offer and clearly instruct the solicitor not to proceed if it turns out to be a leasehold house ( yes its a house) though im now a bit worried about the council tax as it seems to be one band higher than other older local similar size properties just because its new

You don't need to pull out, but you do need to ensure your solicitor is very clear with you on the risk associated with a leasehold and ensure your mortgage company is happy.

Also thanks for clarifying it is a complete house - you would be supposed how often people use the word house to describe a flat!
 
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Stathern Jc

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For new developments I would ask myself why the houses are being sold as leasehold when presumably the developer owns the land and could if they wished sell on the properties as freehold.
Even if the leasehold charges don't appear likely to escalate exponentially what is the risk that an "apparently friendly" leaseholder could sell on to a shark, and how would you know if that isn't already the intention?
 

Mcr Warrior

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I would still have a problem with a leasehold house regardless of the term or the current situation in relation to. You have no control over who owns the freehold and how they operate their rights.
Valid comment although a freeholder's rights are normally fairly limited if you pay the annual rent charge on time. Depends on the terms of the individual lease, of course. Solicitor will be able to advise if anything particularly onerous is or has been included.

Get the feeling though that with mention of a developer that we are talking about a fairly new build house here.

Somewhat different kettle of fish.

If the developer ever sells on the freehold (with an escalating ground rent) to an investment firm, it's likely to cost the OP a small fortune to buy it off them at a future date.
 

DarloRich

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Even if the leasehold charges don't appear likely to escalate exponentially what is the risk that an "apparently friendly" leaseholder could sell on to a shark, and how would you know if that isn't already the intention?

If the developer ever sells on the freehold (with an escalating ground rent) to an investment firm, it's likely to cost the OP a small fortune to buy it off them at a future date.
That is the biggest financial risk
Valid comment although a freeholder's rights are normally fairly limited if you pay the annual rent charge on time.
They can set ground rent and service charge and eventually set the terms of a new lease. They can say no your attempts to purchase the freehold reversion or set it at an obscene price! They can also charge you a horrible price for "consents". Fantastic grift. Genius almost.

IMO leasehold houses are wrong. in fairness the government are proposing legislation to deal with the issue and a few negligence cases have sharped up solicitors to the issues surrounding leasehold houses. I would always go and find an old school solicitor rather than go with the one the agent or the mortgage company suggest. You will get a better result and they often offer services you might need in the future!
 

Mcr Warrior

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They can set ground rent and service charge and eventually set the terms of a new lease. They can say no yo your attempts to purchase the freehold reversion or set it at an obscene price! They can also charge you a horrible price for "consents". Fantastic grift.

IMO leasehold houses are wrong.
If it's a 900 year lease with an unchanging de minimis ground rent and no service charge, then the freeholder won't be able to do all that much for the next 900 years, by which time not many of us, including the OP, will still be around!

Different matter for properties with a much shorter lease period unexpired or annual payment amounts which are liable to increase substantially periodically.

I'll certainly agree that these types of lease are wrong, particularly so for a house.
 

DarloRich

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If it's a 900 year lease with an unchanging de minimis ground rent and no service charge, then the freeholder won't be able to do all that much for the next 900 years, by which time not many of us, including the OP, will still be around!


If is the big word ;)
 

Typhoon

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I would always go and find an old school solicitor rather than go with the one the agent or the mortgage company suggest. You will get a better result and they often offer services you might need in the future!
Absolutely. Before anyone goes for the latter they need to ask themselves who the solicitor is (really) working for.

If I was the OP I would also be asking myself how long I intend to live in the property and whether I am likely to have to move quickly (for work or family, for instance). You are having second thoughts because of access to the back wall and leasehold, so might another other potential purchaser - the one you might be trying to sell to.

Have you asked how much it would cost to purchase the freehold? You may not be able to afford it now but you would be able to gauge from the solicitor not just the cost but a feel for how easy it would be.

It is also important what is shown in the deeds as well as on the ground.
Another reason for having your solicitor. A decent one may cost more money, but will save money in the long term.
OK i spoke to the estate agent and apparently the previous purchaser pulled out due to covid affecting their employment. She said that the developer has now made the house freehold. I will go view it again but im still worried about not being able to get round the back. If im ok i may make an offer and clearly instruct the solicitor not to proceed if it turns out to be a leasehold house ( yes its a house) though im now a bit worried about the council tax as it seems to be one band higher than other older local similar size properties just because its new.
Please read what other posters have said about estate agents; like others, I have come across too many who appear to think it is OK to stray from the facts. Also, remember who pays them and when they are paid.
Also the potential purchaser may have said that they pulled out because Covid had affected their employment, but so would I, even if it wasn't true. It would be difficult for the agent to argue with that but should the reason be that the property was leasehold, no access to the back wall, they had found the crime figures were high, or whatever, the agent might try and browbeat you into changing your mind.
 

hi2u_uk

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To be honest this is only one of two properties i am interested in viewing. I havent found anything else i am even slightly interested in viewing. The other property is in need of significant redocration and the street doesnt look like the nicest plus its not advertised on the popular websites like rightmove or zoopla. I am only doing this because i have an offer on my place which i accepted yesterday . I have explained to the buyer that i havent found a place but im not sure how long they are likely to wait before saying they want to pull out from the purchase of my place. I dont want to loose a purchaser but i do wonder if i wait a week or two something else might pop up that would be more suitable.
 

Ediswan

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I have an offer on my current place so am scrambling around to find somewhere i want to purchase as i don't want to loose this buyer.
Have you considered putting some of your stuff into storage and renting for a short time? I have friends who did that, worked well, also make you a 'no chain' buyer.
 

Gloster

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Having read all the above, I would be seriously looking at the other property: there seem to be an awful lot of potential pitfalls with the one in the original post. I would be interested in knowing why it is not on the various websites, but there are plenty of perfectly acceptable reasons. And don’t put too much weight on the state of the interior, so long as it is livable: you will probably want to redecorate before long (or, like me, you are not worried about living in a tip). And the street: unless there is some very obvious problem, you won’t actually be living in the street.
 

simonw

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To be honest this is only one of two properties i am interested in viewing. I havent found anything else i am even slightly interested in viewing. The other property is in need of significant redocration and the street doesnt look like the nicest plus its not advertised on the popular websites like rightmove or zoopla. I am only doing this because i have an offer on my place which i accepted yesterday . I have explained to the buyer that i havent found a place but im not sure how long they are likely to wait before saying they want to pull out from the purchase of my place. I dont want to loose a purchaser but i do wonder if i wait a week or two something else might pop up that would be more suitable.
Only you can know why you want to move and what kind of house you would settle for. A bunch of strangers in the internet can't really answer that as we all have different ideas and skills, as you will see from the different answers you have got. However, I think most people will agree : do not take anything the agent tells you as the truth, you have no come back against anything they say and they are acting for the vendor, not you
 
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