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Beware the Traps of Leasehold Property Ownership
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Over the last several years, there has been an increase in demand for affordable housing in the United Kingdom. As a result, some builders are building residences for purchasers on a reduced budget.
This is clearly excellent news, but it may come at a cost.
Keep an Eye on Things:
It's nothing new to sell a house as a leasehold, and it's not always a negative thing. It all depends on the leasing conditions.
Some property businesses, on the other hand, have sold leaseholds to other property companies. These businesses, according to The Guardian, have offered to sell the homeowners the freehold rights to their house for a premium sum. If the owner refuses, they can keep paying the ground rent, which increases every 10 years.
The lease on a new-build leasehold property is typically 999 years long, with a ground rent of roughly £295 each year.
Our lease extension experts can guide you through with efficiency.
Make sure you Receive Legal Guidance before Extending your Lease:
When a leaseholder is uninformed of their statutory entitlement to an extended lease, they may be forced to accept a terrible bargain from their landlord. The Landlord might give a lease period that is shorter than the statutory term, require the leaseholder to pay a higher ground rent that is often changed, or simply demand a payment that is substantially greater than what is could be if the leaseholder had proper professional advice.
In Fact:
As a result, some homeowners might find themselves between a rock and a hard place. They may either pay the escalating ground rent payments or a higher price for the freehold.
When one buyer acquired a leasehold house, they were informed they could buy the freehold for £2000 to £3000, according to Guardian Money. However, they were informed a few years later that the leasehold had been transferred to a new property business, which then requested £40,000 to purchase the freehold.
In conclusion:
When purchasing a home, read the fine print on all of your contracts with the seller. If you're buying a leasehold property, make sure you understand the contract's provisions and question your lawyer about the lease's long-term cost, the option of purchasing the freehold (and how much it would cost), and if your leasehold might be transferred to a third party.
For further questions related to lease extensions and property, contact one of our experienced chartered surveyors at Leasehold Valuations.
