Vocal Voices

If you do not know the difference then you should probably not be allowed anywhere near a mortgage.

About six million of us live in leasehold properties, I am one, and it is a process that has been going on for centuries. It is not new and the rules are there for everyone to see.

Now we learn that "thousands" of people are "surprised" to learn that they do not "own" their properties or that the freeholder (of the land on which the properties are built) and who allowed the issue if leases can sell that land and the leases to a third party who can also do the same.

Maybe before handing over their £X00k for their perfect des-res they should have done some research, and, maybe, they should also have asked their legal representatives to explain things to them in great detail.

They would have had the paperwork for them to inspect, so they were not scammed, misled or mis-sold their properties, as they now claim, they were just naïve.

Yes, I think that the problem is not so much the stark black and white of renting versus owning, but the old fashioned hybrid concept where you owned the building, but someone else owned the land, for which you had to pay ground rent. For example, my folks paid £25 per annum ground rent (to the Ecclesiastical Insurance, IIRC) on one of the houses I grew up in back in the 50's, until such time as my F "bought out the freehold" for a few hundred pounds. Again, IIRC, it was a fixed 99 year "lease", and the payment was not exactly onerous. My F was more concerned that the 99 year term was getting closer to ending.

The modern method used by some of the major housebuilders uses this concept, but the terms are far, far more onerous - break clauses every few years allowing the ground rent to be doubled, and eye-watering buy-out clauses. So the householders are trapped by the housebuilders greed, the properties become extremely difficult to sell, and the whole thing is toxic. This is something that, frankly, needs ending.

You're quite correct to say that their legal representatives should have picked this up during the conveyancing process and told the prospective purchasers. But I guess sometimes all the other "goodies" and discounts on offer from the housebuilders makes the purchasers blind to this "little bit of small print". I'd put the housebuilders firmly in the frame when it comes to the blame game, TBH, as much as the purchasers and the solicitors.

Ah but Frank, what about flying freeholds?

To be honest leasehold is little more than rent except the lease holder has more rights on the property leased.

The later in the lease you buy it the more "rent" you are paying.

I used to think it was scandalous when I first saw it. However in many of these places rent is so high that the leasehold can be cheaper.

When a static caravan, on a site in Surrey, comes in at £192,000, the lines between freehold and leasehold are blurred.

But you are right WM, people who don't understand the difference should not engage in getting a mortgage.

Solicitors can be good or bad. I had a bad experience when a home we were having built was flooded just before completion. The solicitors were so weak that I had to take over. We got everything we wanted. The solicitors would have advised us to accept everything the builders wanted.

Am I right in thinking leasehold is not allowed in Scotland?

miasmum wrote:Ah but Frank, what about flying freeholds?

Shell, they do not really apply to the type of leasehold being complained about, but they do on the flat I rent and there are covenants in place. My landlord, leaseholder of a 1st floor flat, is responsible for the roof and upper structure, The landlord downstairs is responsible for the footings and access footway 1 yd from the wall.

As mentioned I am a tenant in a leasehold property. The whole site, 220 units, was sold on and turned 100% to 99 year leasehold with an annual service charge for the upkeep of the communal areas, that was in about 2001. The previous owner and freeholder had rented out all the units and maintained the grounds out of the rental charges. This site, like many new-build sites, is largely unadopted by the council.

Some time back all the leaseholds were approaching the 82 year mark and that is the point at which selling the lease on becomes problematic. The leaseholders had a couple of choices: Individually renegotiate their leases (expensive) or form an association and share the costs as a group - a sort of class action. They chose the latter.

There are ways round many of these things but the "owners" need to be clued up... and that is their responsibility. What is it - caveat emptor?

cromwell wrote:Am I right in thinking leasehold is not allowed in Scotland?

Even before they changed the law it was considered a thing unique to South of the border. You never saw a leasehold agreement or feuhold as it was known in Scotland.

Legislation in 2000 and 2004 banned the practise and in 2012 all long leases over 175 years were converted to outright ownership.

Workingman wrote:What is it - caveat emptor?

It is indeed. Let the buyer beware. It is vanishing from UK law but is still there in certain markets.

I once owned a leasehold flat, but as it had a 99yr lease and was almost on top of Heathrow and the M25 I had no problem selling

I was certainly aware it was leasehold when I bought it! People really should be aware, after all property is the largest purchase most of us will ever make!

We bought our freehold when my wife was still working for a firm of solicitors. We are the only house in a small development which is freehold. The others are on a 999 year lease.We bought in case it was sold to a company who could later the terms.