Leasehold or freehold?
We started our search online. We have spent a lot of time browsing, looking at plans and maps and after we have found few properties that we would liked to see we’ve arranged viewings with estate agent.
When browsing we noticed some flats were marked as leasehold and some as freehold. As we knew nothing about it we paid very little attention to it. I guess we both thought it would get explained to us by people who know what they are talking about, i.e. estate agent.
And it was. As we have arrived at the property that (at least on the paper) was ticking all the boxes, guy who was showing us around casually thrown in ‘Oh, with this one lease is about 86 years. But that’s not a problem, this can be easily extended.’
And so we took his word for it. At the end of the day it is his daily bread.
Flat did tick all the boxes: location, chain free, big lounge, nice kitchen and storage. Price wasn’t bad either, although as we were not the only interested party we agreed on the asking price (more on that a bit later).
As it happened that was about three months before our tenancy agreement was to expire. Great! By the end of June we could be flat owners!
Just as we appointed our solicitor (recommended to us by the estate agent) it turned out that the lease on the flat is more like 83 years. And that process of extension is not as easy as it would seem. One can only start it after living in the property for two years (although seller can start the process and then sign it off to the buyer). And that owner has to pay solicitors costs for both parties. And that when the lease reaches 80 years, freeholder can call the shots when it comes to the price (before lease reaches 80 there are certain rules on how to ascertain properties value and a special body to regulate this and all disputes arising between freeholder and a lessee ( HYPERLINK “http://www.lease-advice.org/”http://www.lease-advice.org/))
After many phone calls between us, our solicitor, estate agent (constantly assuring us that it is easy and straight forward process) and Lease-advice we decided to go for it.
We used online calculators to calculate the cost of lease extension, we spoke even more to solicitor as well as lease advice people, we read countles threads on forums.
We were sure that this is the right decision to make. At the end of the day it is common practise and it is all being regulated by law. Easy-peasy.
Time went on and we heard nothing back from the solicitor. For the first month from accepting our offer vendors went quiet. No documents were supplied to solicitor, no news on when we can exchange.
One day while re-searching WWW for leasehold advice (there is no such term as too much knowledge in this household) I came across this post http://www.lovemoney.com/news/property-and-mortgages/buying-and-selling-property/11446/my-leasehold-property-nightmare-#comments
And so the first cracks appeared.