If you think leasehold is a scam, have a look at shared ownership (for a leasehold!). Not only will you have a mortgage to pay for owning PART of a lease, and then paying rent to the other owners on their share of the property. Given that properties under shared ownership can be a studio or one bed flat, so the 'share' of ownership is a number that won't reflect any sort of living condition in the property (e.g. owning 50% of a 2 bed, 2 bath flat gives one bedroom and 1 bathroom, nope). On top of this, as a shared owner you cannot rent the property out either. All the while, you have ground rent and service charges to pay, since you don't actually own any of the property as all you have is part ownership of a lease. So, if you want to pay a mortgage and rent to live in a flat that you don't own and cant rent out, go for it. Otherwise, avoid!
I wish I'd seen this video before. Just pulled out of a deal where ground rent was doubling every 10 years and my solicitors pointed out to me that it's a high risk. So I wasted some £1800 through mortgage brokers and solicitors without getting a flat and felt bad about it, but looking at this video now it feels like I actually saved myself a lot of money by not making a massive mistake of buying. I'm originally from Croatia and never knew about the lease scam here but looking at your video it feels like British people are not fully aware of it either. Great video btw, deserves way more views than it currently has
So sorry you’ve gone through this process but I am so happy that you have been able to walk away from this despite being out of pocket, you have saved yourself even more money and stress in the future!! Absolutely - there is still so little info out there for people going through the process, you often don’t find out this stuff until it comes to selling
Very interesting video thanks. I could relate to most things you mentioned, when I sold my flat. One problem I had was the lease didn't mention I owned the upstairs of my split level flat! Also,, until I put it on the market, I had no idea it had a short lease or that my name was misspelled on the title document. In the end I sold at 40% of market value, and the whole thing was up in the air until completion day, because the deal rested on getting the BSA certificate. I breathed a sigh of relief when I had the money in the bank, but more so because at last I didn't have my name on the deeds.
Leasehold is like the soap you get on the floor of a prison shower and the freeholder is the big man standing behind you. No legal expert can give you a better analogy.
This happened to me with my first flat. Charges initially manageable and no big deal soon eclipsed my mortgage. I sold it for half of what I paid, to a cash buyer. Any longer and I wouldn't have been able to give it away, nobody wants to take on that financial liability.
So sorry you went through this too, it's just the worst situation to find yourself in, glad you managed to extricate yourself from it eventually even though it was at a loss. You hear so much about mortgage rates and rising costs but no-one talks about how financially damaging leasehold property is.
Your video is brilliant and should be essential viewing for anyone looking at buying leaseholds. Estate agents should also be advising about the ground rent value and significance of this at the time of viewing.
Great video, should absolutely have more views! Another thing to note is that you can often purchase a copy of the lease agreement for the property you are interested from the Land Registry for a nominal fee of £20. That way you can get a breakdown of the fees and fee increases, terms and conditions, forfiture clauses etc before paying out for a solictor/ survey. Alternatively, I'd be interested to know what you think of share of freehold flats? They seem to avoid a lot of these issues, but may bring about their own headaches in trying to coordinate maintainence with the other shared owners.
Wise words indeed from one so young. Thank you for sharing your experience and for the good advice. You've highlighted all the potential pit falls to look out for, in a clear and concise manner. I'm presently looking to buy a flat, having previously only ever owned houses, so I'm unfamiliar with the implications of Leasehold, Ground Rent, Service Charges etc. This will certainly be very beneficial in helping me weigh up all the pros & cons before committing. Thank you once again; subscribed 👍
Thank you so much for your comment and I'm so glad it has been useful. There definitely is flats out there that won't have the same issues, but just being mindful of the pitfalls with leasehold properties will help with making an informed decision, good luck!
Totally agree. I recently sold my flat in a small block we managed between us, nightmare because new owners refused to pay service charge on time, removed fire doors, didn’t contribute to works needed and wanted to run an air bnb which was against the lease. Never ending headaches and inadequate sinking fund for legal action…Now happily living in my new freehold house. Never again
In your case you were both a leaseholder of your flat and also a co-owner of the Freehold. The problem you illustrate is the there are difficulties on being both a leaseholder (trying to get enforcement of covenant e.g. no AirBnb), as well as a Freeholder (trying to get service charge out of people who don't pay).
These landlords are sharks. Had to sell my deceased mother's flat. Landlord wanted £30k to extend the lease - couldn't sell without that. They were charging £540 a year buildings insurance. Then they said we had to get a deed of variation as the internal layout had been changed - it hadn't and physically couldn't have been where they said it had. We were at a stalemate as there was no onus on the landlord to prove this. Another £3k gone. In the 40 years the flat had been owned by my family the landlord did nothing to improve the building. Just as we were about to sell to the buyer the landlord said unless we set up a right to manage company they'd have to come in and take over management - Southern they were called. I Googled them and read bad reports about them doing this so we had to set up a right to manage company. Another £6k - solicitor was a shark too. I said never again will I get involved in a leasehold flat. Just to show what a ripoff the landlord's buildings insurance was, after we set up the right to manage the building insurance dropped £400 a year per flat. For the £540 we'd been paying, or my mother, all those years not once could we claim on anything - e.g. the render was falling off. Landlord said nothing to do with them - wasn't covered under the buildings insurance! Avoid Southern landlords - complete sharks.
Had a similar situation to you...except that I live in a freehold house. Just sold my it (thank G-d) .Didn't help that I live next door to the middle class neighbour from hell ( the equivalant to your landlord) . I was legally obligated to tell the new owner that my neighbour was convicted of harassing me and was given a 3 year Restraining Order. He is so evil that when he found out that my house was on the market he rang the selling agent AND rang my solicitor to say that we have an ongoing boundary 'dispute' . He did this for the sole purpose of trying to sabotage the sale. Luckily for me , the new owner wasn't deterred. We exchanged contracts which means that the sale is legally binding. She has also signed a form to waiver any future claim regarding the next door neighbour.
@@tonyadams8812 God Tony, you're so lucky to be getting out. I hope your buyer doesn't have any problems in the future with the neighbour - but you've declared it so that's good. The last property I sold I had a nightmare neighbour. I can't begin to tell you what he and his wife did - they were middle class too. They were psychopaths. Typically, it was over a parking space - right outside my house - they wanted to park there but it was mine. After it became clear I wasn't budging I had 2 years of him banging on walls in the middle of the night to wake me up on and off, staring at me when I left the house, turning up various places I was and just standing and staring. Pure harassment. Police didn't do anything to help. I actually thought he might try and scupper my sale too but my estate agent knew him - the psycho was also an estate agent. So happy to be out. I've heard from a neighbour they're behaving themselves. They picked on me as I was on my own. Bullies.
This is massively eye-opening and useful considering I am looking to buy my first property. Depressing that many people can only afford a leasehold property.
That’s the problem, leasehold is very much the only way onto the property ladder for many and even worse in big cities. Hopefully it will be easier in a couple of years time when leasehold reform comes in but it takes time so it’s important to be aware of what to watch out for!
Mime stayed more or less the same the 7 years I was there. Ground rent £60 yearly until leasehold extension goes through and service charge £70 a month for cleaning and gardening of communal areas. The services go up in price so the service charge has to.
Brilliant video. I also had an absolute nightmare with my solicitors when selling my flat but for different reasons. It took 7 months and it was unbelievably stressful. I nearly lost the house I was buying too as the seller was so angry with how long it was taking. He said in the end that he will give 2 days and if it doesn’t complete he would pull out of the sale. Thankfully it went through at the last minute by some kind of miracle and me literally begging my solicitors to hurry up. I didn’t even have a moving date until 2 days before so had to pack up everything and sort removals in that time. It was all a complete mess and the solicitors were atrocious. I would never buy a flat again even though I had mostly a good experience whilst living in it. It was reverse freehold though so not the same as yours. My dad just put an offer on a flat with short lease and high management fees etc and I’ve begged him not to do it. Thankfully he’s changed his mind. He’s downsizing so he thought a flat would be a good idea. I’ve talked him out of it. Your shared experience is so informative and will help many people. Thank you
Thank you! I honestly think the whole process of selling a flat is the worst part, it takes so much longer, so glad everything pulled through in the end for you. And SO glad you have managed to talk your Dad out of it too, he's better off in a small 1 bedroom house that is freehold that he knows is his, good luck with his search!
Thank you So much for this. I have to going crazy trying to decide if I should buy a flat I looked at a while ago. This video has put me right off. I think you saved me an enormous amount of hell. Thank you
My leasehold is a 1000 years and it started in the mid 1970s with a ground rent of 5 pounds a year. I ve not encountered any problems with it having unexpected costs as it is a house but I would like to buy it out.
since leasehold i've developed a rule of thumb, let then take you to court. the process of going to court takes forever, and the leases are clearly not fair (hence the reform bill) so you stand a good chance the court will be on your side - just cos they have "a legally binding document" doesn't mean the court won't rule in your favour. and my management company has not seen a penny from me while we wait for a court date....
I am a landlord who has separated title and created 999 yr leasehold properties my ground rent is peppercorn £0 & the yearly charge for upkeep is £575 (average per property) This includes buildings insurance 4 properties in all . All 4 properties have outside PIR lighting so all 4 properties light up the communal entrance . In the process of selling the 1 bedroom flat , My tenants of five years are purchasing the 2 bed flat from me , The other flat & a shop will also be sold once this happens I am gifting all 4 tenants the freehold the most it will cost them is they pay my legal fees . Not all leasehold properties are bad news & I don’t have any cladding on my building .
Thank you for sharing this as it's so refreshing to see and what a lovely gesture, I honestly think it makes a huge difference when you're not dealing with a large freehold company as these really are the sharks in the leasehold system.
Your experience was identical to mine ! Went through so much stress. Luckily I had a great estate agent. Finally have a nice house 🏡. But I do look back regularly on these situations
@@markroyds23 I remember going down the dead of variation route, the landlord wasn’t interested. Had to do a indemnity policy in the end . I know how you feel , horrible situation to be in. But you’ll be looking back at this one day in relief. Keep positive
I am glad i did my research about leasehold vs freehold when i bought my house over 10 years a go now. To me leasehold felt like a scam which was not on the news. I literally did not understand how you could pay mortgage but did not own everything and have other charges on top of that, although buying price for what you get is cheaper compared to freehold for similiar property. But looking through zoopla, 'Freehold' then the price was my number 1 priority. Anyway, bought a nice simple house. Mortgage paid off early.
But you are saying You didn’t read the contracts so I think that’s probably the most important advice given. But yea I don’t know why anyone would want a leasehold anyway, it’s modern day feudalism. Great video.
Yes, definitely naivety on my part for not reading and understanding the lease beforehand, although the £250 ground rent issue didn’t kick in until 19/20 so would have had no idea this was coming. Thanks for watching!
Lots of reasons. Leaseholds are in excellent locations close to work. Freeholds that are affordable are located far from work and so stressful commute day in day out. Alot of the guys that have freehold at work are bald presumably from the stress of commuting
Feel your pain and personally would avoid leasehold at the moment because service charges will increase significantly with inflation and there are numerous legal issues surrounding ground rent making it overly complex to buy and sell. Agree with your recommendation to read the lease carefully before buying but your solicitor should advise, listen to them. It's also important to confirm there is a sinking fund that's adequate for ongoing maintenance of large ticket items like the roof. Also look at the rate of increase for the service charge over a number of years (where possible) and factor that into your future budget, they can go up alot and quickly. Finally make sure the length of lease is sufficient that when you come to sell it won't need extending as that's also expensive.
Great suggestion, many thanks for watching. Lease extensions is a BIG one, can save you a whole load of stress and worry to find this out before buying
Read your lease or get a good solicitor or both. Personally I have ensured my freeholder can not increase the ground rent/service without 6months notice. I also negotiated that if the freehold is sold that the new freeholder will be bound by the above terms. This gives me plenty of time to sell if the shit hits the fan and an aggressive management firm becomes the landlord. PS.... My property is a house not a flat in a building - where there are clearly more liabilities especially if the block is old. A new build that is @5years old would have had any initial issues fixed and be low cost for ant landlord to operate. So low service and ground rent costs and insurance.
That's great advice - you're right, the issue becomes apparent when a large freeholder purchases it which is what happened in my flat, there is no exceptions to the rule or movement of costs with them.
It's so difficult, especially in London. Here is the blog on the topic: www.sleek-chic.co.uk/2022/05/why-i-would-never-buy-a-leasehold-property-again.html
@@mbbx5va2I cannot tell you how many people I know that bought leasehold flats and lived in them for 4 or 5 years and then sold them, using their profits and savings (they tended to have mortgage payments way lower than these private extortionate rents in the rental market. So long as the flat has a long lease and reasonable charges, many people do well in them. A friend's son bought a 2 bed flat, lived in it for 4 and a half years and due to new baby and newly married, sold the flat and bought a 3 bed house. He made a very attractive profit too. The vast majority of young people in 2024 will never own a home. Private renting with extortionate rents and no fault evictions are a living nightmare. The trouble with YT is people share their journey as fact for all, which is very far from the case.
great video, u should share that to the bbc and the housing association to help the leasehold reform 2023 to become reality. I pay £350 for my ground rent and the service charge has been increased to £5200 per year , I'm disgusted of the landlord but can't do anything
Is there any quantitative data about what percentage of freeholders have service charges above say, £5,000 in any given year, £7,000, £8,000 etc? And if they go up that much, how long they stay at that level before coming down again? I agree these stories seem bad but it would be good to put things in perspective.
I'd definitely have to look into that further, service charges and their 'inflation' so to speak is all to do with terms set out in the lease for that property so they can be wildly different, from my knowledge service charges aren't something that ever decrease though, they usually rise with inflation or a set % increase every X amount of years. You're only going to get those high figures of service charges with huge blocks of apartments, those inside London and often those that service lifts, small blocks won't come close to this. There was 4 others in my block and we paid around £1.5k-2k a year.
@@NicoleSageI pay close to £10k in a 1930s mansion block,85 flats with lifts concierge in central London. No gym no beautiful roof terrace no nothing. We bought the freehold and is run by the residents association whom I think are cooking the books. 😭
Thank you so much for this. I suspect that we will have to wait for a strong government to sort this out; one which isn’t bought off by the freeholders.
Totally agree, I know what was proposed in the King's speech really does hang in the balance on who gets voted in at the next election. Fingers crossed
Thank you so much for this video. Was thinking of buying a flat but will not be doing this now. If they abolish leasehold then maybe. But not until then. So for all the costs you incurred whilst in your flat its only the same as renting really. Expect with renting if anything is wrong with the property the landlord has to deal with it. Either way your screwed me thinks. Only way is freehold for sure. 😊
Thanks for watching and glad it was helpful! Sounds like you're doing the right thing, if I could go back in time I would have saved a bit more and waited for freehold :)
They didn’t! I purchased 6 years ago so not sure if the ground rent issues were such a thing then, very disappointing though, conveyancers seem to be quite hot on these issues nowadays.
Thank you for this video, really clear and covers a topic completely draped in complexity and industry jargon I’m currently in the situation identical to your buyer, I’ve never heard of any of this before but the flat we hope to buy has ground rent linked to RPI Our solicitor has asked for the seller to get a deed of variation, but what does that actually mean? Is that capped then forever, or just for a certain period of time? This has thrown a spanner in the works as, like you say, I don’t want to be trapped in an exploitative situation and further down the line struggle to sell
I’m also a bit confused by the indemnity policy, what exactly is that? I realise you’re from the perspective of the seller, but do you know how that would affect the buyer?
So sorry to hear you're going through this now. So the deed of variation basically includes adding a clause to the existing lease. It is usually capped forever, so if the current ground rent is £250, they would cap it at £250 for the remainder of the lease term. For the seller, and actually yourself, a lease extension would be more favourable (similar amount of money) and it would add 90 extra years to the lease and ground rent would be a peppercorn (nominal value such as a £1). An indemnity policy is just an insurance policy essentially - the reason ground rent is an issue over a certain amount of money is because it's classed as an AST, so if you were for forfeit on your ground rent payments, the freeholder could take it back (leaving the lender with nothing to recoup their money). So, this will definitely protect you and the lender, but the issue you have is when it comes to selling the property, plus a lot of lenders aren't accepting indemnity policies as time has gone on. I hope that makes sense, let me know if I can help any further.
If I buy leasehold property and is saying that ground rent is 0 and service charge 0 as well, can it change? As I find some properties which 0 charges.
Potentially if the freeholder was to sell the freehold to a different freeholder, you are usually offered to buy a share of the freehold before this happens though so you would have prior warning to it
Lease hold Properties are Fine as long as there is no Ground rent or service charge , its if the ground rent goes above £250 and you default on paying the Ground rent , then the lease holder can Re posses the property this is very very Rare though . But this is hopefully going to be overturned in Government this year with a new Bill. I own a lease hold property with 992 years left on the lease . There is no Ground rent and no service Charges . so Its no problem at all .All Flats are lease hold , so don't be put off of buying a lease hold property , Just don't Buy one with a Ground rent , and if possible a maintenance Charge . Although Maintenance charges are common in Blocks .
@@NicoleSage I am checking a leasehold detached house for 400k, and it says no ground rent or services charge was collected. can they start collecting in future? what would be the charges if someone wants to buy the leasehold. Could you give me details on it? My friends suggested to stay away.
@@Rajvtube I think you need eyes wide open for a leasehold which hasn't been collecting anything, I believe they can back date 6 years but it has to have been demanded at some point. Ideally, you need to find out who the freeholder of the property is to get info on the lease before proceeding. Yes - you can buy a share of freehold, this can vary in cost and is usually calculated on years of remaining ground rent and a premium so would be a bit trickier in this case. It could cost £100s or £1,000s depending on this. If the current seller doesn't know who the freeholder is or has a lease, they can request this through the land registry for a few pounds, hope this helps.
Yes I Bought a free hold house but the Ground it stood on was not mine in the free hold of the house It came with at first a pepper corn rent and service to pay which went up in the first couple of years I lived there and I was surprized I managed to sale it I was honest about it and told my buyers the truth so no guilt on me as I believe what goes around comes back to bite you, So I was so glad to get rid of it it was a Bellway house and I really hope they pulling this sort of scam Karma bites them and they go out of business, I know in a way it was told to me but I did not realize how much it would rise , and how can you Buy a freehold House but not the land it stood on
What a nightmare, it's shocking that this was allowed to happen with houses. This is not allowed to happen anymore with new build houses luckily, but retrospectively so many are affected.
I bought a flat leasehold , I’ve ended up director of the management company :-/ , we have a problem person in the first flat and she has made it and is still making it a nightmare. She was stealing money from the house funds (£1300, it was more ) and everything is an absolute pain because of her , we only pay £40 to £50 per year ground rent and the service charge is only £68 and she still refuses to pay the same as everyone else :-/ , we had to take her to court for the £1300 , it only cost £1700 🥳🤯😳😵💫 , have a heart for those like me who have ended up managing a house and don’t want to :-/ never again 😳
I totally feel for your position, whilst everything is out of control with a managing agent there is no way I would want to take it on personally because of the issue you have just outlined, it’s important for people to see this side of it too as buying share of freehold isn’t always the answer, well done for fighting it and hope you don’t have anymore issues in the future!
Basic rule of thumb - you can't do structural alterations inside your flat unless you have permission, decorating is fine, even if it's a new kitchen being installed I believe you have to ask. Pets, you have to ask for permission too. Let me know if you have any other specific questions about alterations and I'll do my best to help
I need advice. I wanted to sell my shared ownership property. 50%. I filled the forms. But had not received management pack yet. The pictures were taken. No solicitors had been engaged yet. I decided to not sell.. But lo and behold I am now requested to pay 1140. I had not even engaged any lawyer. Any advice?
That sounds about right from the management company, if there is an email of you instructing them and correspondence back from them there's nothing you can do unless you advised them to stop the process. There's little to get around management companies like this unfortunately. I'd also recommend posting in the national leasehold campaign group on Facebook as someone may have gone through the same thing, thanks.
People who complain about the UK, go check Germany. Buying costs as first time buyer are between 10% and 12% of the property price. Yes 12% !!! Imagine you buy a property and you are already making a 10% loss on it
Wow that is terrible, you'd probably pay may £3k max for legal fees for a flat purchase in the UK, a lot more to sell but nothing like Germany, thanks for sharing@@Mehdital89
NEVER BUY a LEASEHOLD Property.. I luckily got rid of my flat back in 2015 because of ridiculous Service Charges. I pulled out of 4 other Leasehold properties because of problems. In the end I paid another 40K & bought a 2 bed house instead. Best decision I ever made. You literally are better off renting than buying a leasehold property.
@@NicoleSageI believe freehold properties that are built on new developments also have to pay service charges if the council doesn’t manage the shared space
@@ghgfrghfrhgdxvgredghhgvfth1573 You'll get all that information from yr Conveyancing solicitors. If U don't understand anything then ask, as that's what ur paying them for..
@@robh8814 true tho I believe freehold houses on new build estates generally pay service charge fees. If this is the case and a management company manages the estate the buyers solicitor normally requests a management pack to gain an understanding of year end fees as well as additional information regarding fees charged by the landlord/management company. Plus I don’t think freehold houses on estates don’t have as many legal rights as leaseholders when it comes to SC fees.
From what I understand the buyer was actually an investor doing a buy to let, so no I don't feel guilty but regardless or not, I would not hold the leasehold burden for the rest of my life as to avoid passing it onto someone else who actually wanted the property. Leasehold reform may be coming into effect in November following the King's speech anyway
Why does anyone buy a leasehold property? I'm working class, from the north and in an unskilled job yet I was taught growing up in the 80s never to touch leasehold property in any way and that it's nothing but a scam. After leaving university I actually had the sense not to follow the rest of the brain drain migrating away from our villages and towns to our cities. This means that though I'm only earning 30k a year in a none professional job, which is a high wage for the town I live in, I managed to buy my own freehold three bedroom semi detached house on a single person mortgage at a mortgage repayment amount of £250pcm.
The golden rules are, firstly don't let your heart rule your head and secondly read everything and make sure you understand it before you sign anything. Then if you don't like something about it, then have the courage to walk away from buying it. That way you keep out of trouble to start with.
Yes, great advice. Unfortunately leasehold even in smaller cities is only possible for single income earners, totally depends on the city and house prices. You'd be lucky to get anything with £250 month mortgage where I live for a 3 bed house unless you put down a 60% deposit, plus factoring the interest rates of today There was never any education around leasehold when I purchased so always important to continue raising awareness for those who can only buy leasehold today and what to look out for.
So you are an old fart with a uselless degree? Dont come on here giving the bigun when you was lucky to get a cheap house and mortgage years and years ago you helmet. The world has changed..you had a grant to attend a Polly technic, you didnt move away as you had no other choices, your house and mortgage is LUCK. Thats all.
YES - however, since the election this may change what was initially passed. I have done an updated video on what that might look like for leaseholders here: ua-cam.com/video/zLZT85HHFfY/v-deo.htmlsi=K-yGPsdtQbTmwNot
I would like to know if I can be charged ground rent, if I pay monthly rent and service charge on a housing association flat. I keep getting letters asking me to pay over £3000 in ground rent. I do not own the property. I just ignore it and assume this must be a scam.
The UK government will never outlaw leasehold and have stated that they have no plans to review or do so. Why?... because of the 'huge' annual revenue that it generates for 'them' in taxes. There are national and international companies out there that their business model is solely built on, buying up freeholds from developers including the exclusive estate management rights from the developer, who has no problem selling it to them, has that finance goes towards their next planned development - and the cycle continues. I lived in spain for a number of years and know that Spain does not have such a thing has 'leasehold' properties. When you purchase a house or in that matter an apartment, you own it outright (the walls, floors ceiling and everything constructed within it). This has been an ongoing issue in the UK and many people are outraged buy it. Recently the UK government have now even gone as far has letting developers sell 'houses' with a lease!. Leasehold is a 'government scam' because they are the ones who have the ability yo outlaw it...but due to their own greed, choose not to. Finally, adding to your issues of selling your previous home, with ground rent D.0.Vs and new development paperwork etc. I recently reserved a new development apartment. I was offered to use the 'developers solicitors' ...which I declined, and informed them that I will be using my own. On the outset my conveyancing solicitor found this £250 annually reviewed and measured against RPI immediately. We refused to proceed unless this was removed and set to zero (peppercorn). Which after a months of struggle the developer agreed to do, but we later found out that they had not got the mortgagees of their development consent or signature for the new D.O.V!. Also, new developments come with a charge against them (the money lent to the developer by the lending bank to build the apartments etc) My solicitor instructed them that the charges had to be removed by the lenders (bank) solicitor prior to exchange of contracts. This they said could not be done prior, but would be done post exchange and completion (within months!???). Also, with my solicitor being very 'anal' regarding correct documentation to protect me the buyer and not budging until he got it, the developer had said that their other buyers in the development had not raised the same issue or been so detailed has my solicitor had been. (etc, requested legal documents missing or not even provided etc) And the sole reason for this was because 90% of 'those other buyers had chosen to use the developers solicitors (presumably due to being told it would be 'quicker' for them or because of a financial package.....which is a big red flag and a 'no-no'. Because when those present owners come to sell, there will be missing legal documents/ incorrect worded contracts etc which the new buyers solicitor will request, but unfortunately would never had been supplied by the 'developers solicitor' when the property was 'originally' purchased. Which most lenders will not lend on.
Thank you for your comment, couldn't agree more with you. I have seen more houses with 'leasehold' terms in the past few years, absolutely terrible. A system designed to benefit everyone other than the 'leaseholder'
Luckily I did because of the area but I still incurred over 5K worth of selling fees to push it through, the estate agent chose the price but it was pushed up as I sold just after Covid when the market was buoyant
Great videos. All the while, while you're chatting, I am thinking 'who the fuck actually took on the shit show that was your flat'? I nearly bought a leasehold up north but fortunately I saw sense, bought an old Victorian place and now walk around with a smug look on my face most of the time. Smug-smug.
Yes - share of freehold is always considered better if you can get it. It can still cause various issues though and when it comes to selling, but always a better option than standard leasehold.
@@kwekueghana3683 Because you don't have a freeholder that calls the shots/charges whatever they like, instead you would own a share of freehold, along with the other flat owners (typically), so you would all be responsible for the management of the property instead. This of course can come with its own problems though.
@@NicoleSage what problems could happen? I've currently saved 27k and I'm looking to get on the ladder but I've been put off a leasehold abit but can't find a freehold flat. I'm 26 and single so buying a house rn isnt that feasible atm
@@kwekueghana3683 If a large issue was to arise with the property that cost a lot of money to fix, there could be one of the freeholders that says they're not paying for it. If everyone has a mutual agreement then it's not a problem - just ensure you do your due diligence during the purchase property as you will be allowed to view the accounts etc for previous years.
I am really sorry to say, but I don't agree with quite a bit on your video, you fail to see the other side. Your experience was n't great, but your view of the world is being tainted by this. There are pro and cons to living in a leasehold flat. The service charge can be a downside. Ground Rent - you resent paying this, but there are Ground rent from old leasehold flat from the 1970s, where the ground rent today is £25 per year. It is n't worth collecting and Freeholders disappear. This causes a huge number of issues. It is n't worth the hassle collecting. This is why I think they need have the Ground Rent at say £100 per year and rising with inflation. (The cap of £250 a year might be fine for 2023, but in 2053 with high inflation it may ground rent might be worth nothing). Freeholder - is not allowed to make a profit. If the lift breaks down and the managing agents send someone to fix it for £1,000. Then they charge the residents £1,000. They can't add profit and charge £1,100, for their time and effort. The only time, Freeholders can make some money is leasehold enquiries or extending the leases. Sometimes it is would be £200 for enquiries, but £800 is extreme as it was in your case. In some cases the Freeholder has to consult a solicitor for advice on certain matters (they have to read the lease and then advise accordingly plus the drama of KYC). However, LPE1 form has got fatter over the years. They ask a lot of questions. Freeholder is under not obligation to answer those questions. It is a burden on Freeholder's time. Freeholders can be held liable for any errors. Freeholders to get a rough time, with leaseholders not paying service charge. There is a constant tug of war. Sometimes people don't pay for just reason (as in your electricity example), however, at others time, they expect a free lunch. Sometimes you get crooked Freeholders, who overcharge or get someone they know to carry out repairs. Also, Freeholder can only go to big companies for repairs (who give invoice and respond to quotations). Small builders who are cheaper, just don't want to hassle of providing quotes for tenders or jobs they may not get. You mentioned Airbnb - in your building. However, there may be leasehold restrictions about this. You would expect your Freeholder to do something, but then people resent paying ground rent (which is peanuts). Many managing agents charge around £250 per year per flat. The Ground rent going over £250 is an over reaction. The government should have just have lifted the cap. There is nothing wrong with ground rent going up with RPI (which is fair), but doubling ground rents are problematic "in some cases". Some ground rent double every 33 years. So there is nothing wrong, as inflation would erode it. However, ground rent doubling every 10 years, could be nasty. Electricity - blocks of flats get charged commercial rates for electricity not residential rates!. Solution: In my opinion, we need leasehold reforms which are fair to freeholders and leaseholders. In my opinions, we need a not-for-profit managing agents and not-for-profit builders who help service blocks of flats. This will help reduce costs for leaseholders. It reduces risks for landlords. In large blocks of flats, we could concierge to bring down security cots. A lot of blocks of flats seem unloved. They have this system in France....
Both the video and your elaborate as well as insightful comment very helpful. I’m due to sign the contract this week but needing to pause, reflect and consult as ground rent is 250.00 doubling in 2028 . Thank you both so much. Suoer educational
Hyper: ... and you say it's not really a problem 🙄🙄🙄 Managing Agents certainly *CAN* make a profit - and do ‼️ They charge for their time, for questions, for Licenses etc. etc. I'm really not sur you know what you are talking about. Yes, there are some properties with ground rents as low as £25 a year, but these are becoming very few and far between. Newbuilds try to sqeeze as much money from you as they can ☹☹
Moneyed ones like her moans about ground rent you look as if she is short doesnt look like it its only once a year what do you expect naive but understandable a flat to me is only for Rent and even now hard going.
I think you’re looking for the word ‘hard work’ - I saved up and afforded all I could when I was 24, yes I was fortunate to live at home prior and save, I made a mistake but the reality is many people can only afford a flat on a single wage income if they are fortunate to buy rather than rent. Please think before you comment because it’s not fair before understanding someone’s situation.
If you think leasehold is a scam, have a look at shared ownership (for a leasehold!). Not only will you have a mortgage to pay for owning PART of a lease, and then paying rent to the other owners on their share of the property. Given that properties under shared ownership can be a studio or one bed flat, so the 'share' of ownership is a number that won't reflect any sort of living condition in the property (e.g. owning 50% of a 2 bed, 2 bath flat gives one bedroom and 1 bathroom, nope). On top of this, as a shared owner you cannot rent the property out either. All the while, you have ground rent and service charges to pay, since you don't actually own any of the property as all you have is part ownership of a lease. So, if you want to pay a mortgage and rent to live in a flat that you don't own and cant rent out, go for it. Otherwise, avoid!
I wish I'd seen this video before. Just pulled out of a deal where ground rent was doubling every 10 years and my solicitors pointed out to me that it's a high risk. So I wasted some £1800 through mortgage brokers and solicitors without getting a flat and felt bad about it, but looking at this video now it feels like I actually saved myself a lot of money by not making a massive mistake of buying. I'm originally from Croatia and never knew about the lease scam here but looking at your video it feels like British people are not fully aware of it either. Great video btw, deserves way more views than it currently has
So sorry you’ve gone through this process but I am so happy that you have been able to walk away from this despite being out of pocket, you have saved yourself even more money and stress in the future!! Absolutely - there is still so little info out there for people going through the process, you often don’t find out this stuff until it comes to selling
Very interesting video thanks. I could relate to most things you mentioned, when I sold my flat. One problem I had was the lease didn't mention I owned the upstairs of my split level flat! Also,, until I put it on the market, I had no idea it had a short lease or that my name was misspelled on the title document. In the end I sold at 40% of market value, and the whole thing was up in the air until completion day, because the deal rested on getting the BSA certificate. I breathed a sigh of relief when I had the money in the bank, but more so because at last I didn't have my name on the deeds.
Thanks for watching! Wow that’s crazy, just so glad you managed to get out of leasehold too and move on - terrible system!
Thank God I came across your video! You have saved me from a potential nightmare! Thank you!
So glad I could help, thanks for watching!
An excellent explanation of leasehold. Thank you for sharing. This is really useful info.
So glad it was helpful, thanks for watching!
Leasehold is like the soap you get on the floor of a prison shower and the freeholder is the big man standing behind you. No legal expert can give you a better analogy.
This happened to me with my first flat. Charges initially manageable and no big deal soon eclipsed my mortgage. I sold it for half of what I paid, to a cash buyer. Any longer and I wouldn't have been able to give it away, nobody wants to take on that financial liability.
So sorry you went through this too, it's just the worst situation to find yourself in, glad you managed to extricate yourself from it eventually even though it was at a loss. You hear so much about mortgage rates and rising costs but no-one talks about how financially damaging leasehold property is.
Your video is brilliant and should be essential viewing for anyone looking at buying leaseholds. Estate agents should also be advising about the ground rent value and significance of this at the time of viewing.
Great video, should absolutely have more views! Another thing to note is that you can often purchase a copy of the lease agreement for the property you are interested from the Land Registry for a nominal fee of £20. That way you can get a breakdown of the fees and fee increases, terms and conditions, forfiture clauses etc before paying out for a solictor/ survey. Alternatively, I'd be interested to know what you think of share of freehold flats? They seem to avoid a lot of these issues, but may bring about their own headaches in trying to coordinate maintainence with the other shared owners.
Wise words indeed from one so young. Thank you for sharing your experience and for the good advice. You've highlighted all the potential pit falls to look out for, in a clear and concise manner. I'm presently looking to buy a flat, having previously only ever owned houses, so I'm unfamiliar with the implications of Leasehold, Ground Rent, Service Charges etc. This will certainly be very beneficial in helping me weigh up all the pros & cons before committing.
Thank you once again; subscribed 👍
Thank you so much for your comment and I'm so glad it has been useful. There definitely is flats out there that won't have the same issues, but just being mindful of the pitfalls with leasehold properties will help with making an informed decision, good luck!
Totally agree. I recently sold my flat in a small block we managed between us, nightmare because new owners refused to pay service charge on time, removed fire doors, didn’t contribute to works needed and wanted to run an air bnb which was against the lease. Never ending headaches and inadequate sinking fund for legal action…Now happily living in my new freehold house. Never again
In your case you were both a leaseholder of your flat and also a co-owner of the Freehold. The problem you illustrate is the there are difficulties on being both a leaseholder (trying to get enforcement of covenant e.g. no AirBnb), as well as a Freeholder (trying to get service charge out of people who don't pay).
These landlords are sharks. Had to sell my deceased mother's flat. Landlord wanted £30k to extend the lease - couldn't sell without that. They were charging £540 a year buildings insurance. Then they said we had to get a deed of variation as the internal layout had been changed - it hadn't and physically couldn't have been where they said it had. We were at a stalemate as there was no onus on the landlord to prove this. Another £3k gone. In the 40 years the flat had been owned by my family the landlord did nothing to improve the building. Just as we were about to sell to the buyer the landlord said unless we set up a right to manage company they'd have to come in and take over management - Southern they were called. I Googled them and read bad reports about them doing this so we had to set up a right to manage company. Another £6k - solicitor was a shark too. I said never again will I get involved in a leasehold flat. Just to show what a ripoff the landlord's buildings insurance was, after we set up the right to manage the building insurance dropped £400 a year per flat. For the £540 we'd been paying, or my mother, all those years not once could we claim on anything - e.g. the render was falling off. Landlord said nothing to do with them - wasn't covered under the buildings insurance! Avoid Southern landlords - complete sharks.
Had a similar situation to you...except that I live in a freehold house. Just sold my it (thank G-d) .Didn't help that I live next door to the middle class neighbour from hell ( the equivalant to your landlord) . I was legally obligated to tell the new owner that my neighbour was convicted of harassing me and was given a 3 year Restraining Order. He is so evil that when he found out that my house was on the market he rang the selling agent AND rang my solicitor to say that we have an ongoing boundary 'dispute' . He did this for the sole purpose of trying to sabotage the sale. Luckily for me , the new owner wasn't deterred. We exchanged contracts which means that the sale is legally binding. She has also signed a form to waiver any future claim regarding the next door neighbour.
@@tonyadams8812 God Tony, you're so lucky to be getting out. I hope your buyer doesn't have any problems in the future with the neighbour - but you've declared it so that's good. The last property I sold I had a nightmare neighbour. I can't begin to tell you what he and his wife did - they were middle class too. They were psychopaths. Typically, it was over a parking space - right outside my house - they wanted to park there but it was mine. After it became clear I wasn't budging I had 2 years of him banging on walls in the middle of the night to wake me up on and off, staring at me when I left the house, turning up various places I was and just standing and staring. Pure harassment. Police didn't do anything to help. I actually thought he might try and scupper my sale too but my estate agent knew him - the psycho was also an estate agent. So happy to be out. I've heard from a neighbour they're behaving themselves. They picked on me as I was on my own. Bullies.
This is really helpful. Thank you. I need to save more and get a freehold!
Thank you and for watching! Definitely agree, wait a bit longer, it’s not worth the stress and money!
This is massively eye-opening and useful considering I am looking to buy my first property. Depressing that many people can only afford a leasehold property.
That’s the problem, leasehold is very much the only way onto the property ladder for many and even worse in big cities. Hopefully it will be easier in a couple of years time when leasehold reform comes in but it takes time so it’s important to be aware of what to watch out for!
Thank you for making the video, glad you are out of that nightmare!
Definitely not worth buying Leaseholds ...the service charges are pure theft !!
100%, the service charges continue to rise with inflation each year and are seemingly uncapped
Mime stayed more or less the same the 7 years I was there. Ground rent £60 yearly until leasehold extension goes through and service charge £70 a month for cleaning and gardening of communal areas. The services go up in price so the service charge has to.
Thank God I have bought a freehold house outside of London, then leasehold flat in London.
Best decision you will ever make, well done!
Brilliant video. I also had an absolute nightmare with my solicitors when selling my flat but for different reasons. It took 7 months and it was unbelievably stressful. I nearly lost the house I was buying too as the seller was so angry with how long it was taking. He said in the end that he will give 2 days and if it doesn’t complete he would pull out of the sale. Thankfully it went through at the last minute by some kind of miracle and me literally begging my solicitors to hurry up. I didn’t even have a moving date until 2 days before so had to pack up everything and sort removals in that time. It was all a complete mess and the solicitors were atrocious. I would never buy a flat again even though I had mostly a good experience whilst living in it. It was reverse freehold though so not the same as yours. My dad just put an offer on a flat with short lease and high management fees etc and I’ve begged him not to do it. Thankfully he’s changed his mind. He’s downsizing so he thought a flat would be a good idea. I’ve talked him out of it. Your shared experience is so informative and will help many people. Thank you
Thank you! I honestly think the whole process of selling a flat is the worst part, it takes so much longer, so glad everything pulled through in the end for you. And SO glad you have managed to talk your Dad out of it too, he's better off in a small 1 bedroom house that is freehold that he knows is his, good luck with his search!
@@NicoleSagethank you. He is going to buy a house now. Thank the lord ha ha 😆
Ahhh amazing news!! @@blackrainbow192
Don't buy a leasehold please,we made that mistake but we eventually got rid of it.
So glad you managed to get out of it too
Thank you So much for this. I have to going crazy trying to decide if I should buy a flat I looked at a while ago. This video has put me right off. I think you saved me an enormous amount of hell. Thank you
So glad you found it helpful, honestly avoid avoid avoid!! Even more so during the current inflation, as service charges will be hiked too.
thank you so much for sharing your story.
My leasehold is a 1000 years and it started in the mid 1970s with a ground rent of 5 pounds a year. I ve not encountered any problems with it having unexpected costs as it is a house but I would like to buy it out.
That sounds like a great agreement - if you find leasehold on agreeable terms then go for it!
Now I know why many flats are for sale for a lot less than was paid a few years ago.......not for me
Yes! There is SO much of this right now, leasehold property is barely moving on the market right now
To anybody thinking of buying leasehold read The Jungle by Upton Sinclair. The last chapter in the book is way of message, but the rest is spot on.
Good work. Just found this channel. Looks like everyone apart from those at the top and those who are playing with cash are screwed.
Absolutely - terrible system!
since leasehold i've developed a rule of thumb, let then take you to court. the process of going to court takes forever, and the leases are clearly not fair (hence the reform bill) so you stand a good chance the court will be on your side - just cos they have "a legally binding document" doesn't mean the court won't rule in your favour. and my management company has not seen a penny from me while we wait for a court date....
And if u lose don't u have to pay their legal fees?
Thank you! This is so helpful and timely for me
So glad you found it useful, thanks for your comment!
The worse problem i had was terrible dogy management company
Thank you so much for explaining so well 🥰
You're welcome, thanks for watching!
Extremely informative and helpful, thank you.
Glad it was helpful! Thanks for watching 😊
I am a landlord who has separated title and created 999 yr leasehold properties my ground rent is peppercorn £0 & the yearly charge for upkeep is £575 (average per property) This includes buildings insurance 4 properties in all . All 4 properties have outside PIR lighting so all 4 properties light up the communal entrance . In the process of selling the 1 bedroom flat , My tenants of five years are purchasing the 2 bed flat from me , The other flat & a shop will also be sold once this happens I am gifting all 4 tenants the freehold the most it will cost them is they pay my legal fees . Not all leasehold properties are bad news & I don’t have any cladding on my building .
Thank you for sharing this as it's so refreshing to see and what a lovely gesture, I honestly think it makes a huge difference when you're not dealing with a large freehold company as these really are the sharks in the leasehold system.
Your experience was identical to mine ! Went through so much stress. Luckily I had a great estate agent. Finally have a nice house 🏡. But I do look back regularly on these situations
So sorry you went through this too, honestly the worst thing I ever did. The relief I feel in my own house now, nothing compares to it 🙌🏻
@@markroyds23 I remember going down the dead of variation route, the landlord wasn’t interested. Had to do a indemnity policy in the end . I know how you feel , horrible situation to be in. But you’ll be looking back at this one day in relief. Keep positive
I am glad i did my research about leasehold vs freehold when i bought my house over 10 years a go now. To me leasehold felt like a scam which was not on the news. I literally did not understand how you could pay mortgage but did not own everything and have other charges on top of that, although buying price for what you get is cheaper compared to freehold for similiar property. But looking through zoopla, 'Freehold' then the price was my number 1 priority. Anyway, bought a nice simple house. Mortgage paid off early.
But you are saying
You didn’t read the contracts so
I think that’s probably the most important advice given. But yea I don’t know why anyone would want a leasehold anyway, it’s modern day feudalism. Great video.
Yes, definitely naivety on my part for not reading and understanding the lease beforehand, although the £250 ground rent issue didn’t kick in until 19/20 so would have had no idea this was coming. Thanks for watching!
Lots of reasons. Leaseholds are in excellent locations close to work. Freeholds that are affordable are located far from work and so stressful commute day in day out. Alot of the guys that have freehold at work are bald presumably from the stress of commuting
Feel your pain and personally would avoid leasehold at the moment because service charges will increase significantly with inflation and there are numerous legal issues surrounding ground rent making it overly complex to buy and sell. Agree with your recommendation to read the lease carefully before buying but your solicitor should advise, listen to them. It's also important to confirm there is a sinking fund that's adequate for ongoing maintenance of large ticket items like the roof. Also look at the rate of increase for the service charge over a number of years (where possible) and factor that into your future budget, they can go up alot and quickly. Finally make sure the length of lease is sufficient that when you come to sell it won't need extending as that's also expensive.
Great suggestion, many thanks for watching. Lease extensions is a BIG one, can save you a whole load of stress and worry to find this out before buying
Read your lease or get a good solicitor or both.
Personally I have ensured my freeholder can not increase the ground rent/service without 6months notice.
I also negotiated that if the freehold is sold that the new freeholder will be bound by the above terms.
This gives me plenty of time to sell if the shit hits the fan and an aggressive management firm becomes the landlord.
PS.... My property is a house not a flat in a building - where there are clearly more liabilities especially if the block is old. A new build that is @5years old would have had any initial issues fixed and be low cost for ant landlord to operate. So low service and ground rent costs and insurance.
That's great advice - you're right, the issue becomes apparent when a large freeholder purchases it which is what happened in my flat, there is no exceptions to the rule or movement of costs with them.
i'm buying leasehold now in london. Sounds horrendous but house prices are crazy. Its all slavery we are slaves. Would be good to see your blog
It's so difficult, especially in London. Here is the blog on the topic: www.sleek-chic.co.uk/2022/05/why-i-would-never-buy-a-leasehold-property-again.html
@@NicoleSage thanks. glad you managed to get a house in the end. My leasehold journey is about to start wish me luck!!
The slaves will revolt at some point
@@mbbx5va2I cannot tell you how many people I know that bought leasehold flats and lived in them for 4 or 5 years and then sold them, using their profits and savings (they tended to have mortgage payments way lower than these private extortionate rents in the rental market. So long as the flat has a long lease and reasonable charges, many people do well in them. A friend's son bought a 2 bed flat, lived in it for 4 and a half years and due to new baby and newly married, sold the flat and bought a 3 bed house. He made a very attractive profit too. The vast majority of young people in 2024 will never own a home. Private renting with extortionate rents and no fault evictions are a living nightmare. The trouble with YT is people share their journey as fact for all, which is very far from the case.
@@mbbx5va2you will be fine with good planning and continued saving.
great video, u should share that to the bbc and the housing association to help the leasehold reform 2023 to become reality. I pay £350 for my ground rent and the service charge has been increased to £5200 per year , I'm disgusted of the landlord but can't do anything
Is there any quantitative data about what percentage of freeholders have service charges above say, £5,000 in any given year, £7,000, £8,000 etc? And if they go up that much, how long they stay at that level before coming down again? I agree these stories seem bad but it would be good to put things in perspective.
I'd definitely have to look into that further, service charges and their 'inflation' so to speak is all to do with terms set out in the lease for that property so they can be wildly different, from my knowledge service charges aren't something that ever decrease though, they usually rise with inflation or a set % increase every X amount of years. You're only going to get those high figures of service charges with huge blocks of apartments, those inside London and often those that service lifts, small blocks won't come close to this. There was 4 others in my block and we paid around £1.5k-2k a year.
@@NicoleSageI pay close to £10k in a 1930s mansion block,85 flats with lifts concierge in central London. No gym no beautiful roof terrace no nothing. We bought the freehold and is run by the residents association whom I think are cooking the books. 😭
Thank you very much for sharing your experience.
Thanks for watching!
Thank you so much for this. I suspect that we will have to wait for a strong government to sort this out; one which isn’t bought off by the freeholders.
Totally agree, I know what was proposed in the King's speech really does hang in the balance on who gets voted in at the next election. Fingers crossed
Thank you so much for this video. Was thinking of buying a flat but will not be doing this now. If they abolish leasehold then maybe. But not until then. So for all the costs you incurred whilst in your flat its only the same as renting really. Expect with renting if anything is wrong with the property the landlord has to deal with it. Either way your screwed me thinks. Only way is freehold for sure. 😊
Thanks for watching and glad it was helpful! Sounds like you're doing the right thing, if I could go back in time I would have saved a bit more and waited for freehold :)
Thanks for sharing.
Thanks for watching!
I agree, I think leasehold is a waste of time.
Absolutely, never again
Did your conveyancer not review the lease and advise on these issues ?😮
They didn’t! I purchased 6 years ago so not sure if the ground rent issues were such a thing then, very disappointing though, conveyancers seem to be quite hot on these issues nowadays.
Thank you for this video, really clear and covers a topic completely draped in complexity and industry jargon
I’m currently in the situation identical to your buyer, I’ve never heard of any of this before but the flat we hope to buy has ground rent linked to RPI
Our solicitor has asked for the seller to get a deed of variation, but what does that actually mean? Is that capped then forever, or just for a certain period of time?
This has thrown a spanner in the works as, like you say, I don’t want to be trapped in an exploitative situation and further down the line struggle to sell
I’m also a bit confused by the indemnity policy, what exactly is that? I realise you’re from the perspective of the seller, but do you know how that would affect the buyer?
So sorry to hear you're going through this now. So the deed of variation basically includes adding a clause to the existing lease. It is usually capped forever, so if the current ground rent is £250, they would cap it at £250 for the remainder of the lease term. For the seller, and actually yourself, a lease extension would be more favourable (similar amount of money) and it would add 90 extra years to the lease and ground rent would be a peppercorn (nominal value such as a £1). An indemnity policy is just an insurance policy essentially - the reason ground rent is an issue over a certain amount of money is because it's classed as an AST, so if you were for forfeit on your ground rent payments, the freeholder could take it back (leaving the lender with nothing to recoup their money). So, this will definitely protect you and the lender, but the issue you have is when it comes to selling the property, plus a lot of lenders aren't accepting indemnity policies as time has gone on. I hope that makes sense, let me know if I can help any further.
That’s really useful thank you
i get the feeling these management companies employ their own subsidiaries to do the work at inflated prices so the service charges go up.
Definitely agree, they always tend to use the same suppliers, totally bent
If I buy leasehold property and is saying that ground rent is 0 and service charge 0 as well, can it change? As I find some properties which 0 charges.
Potentially if the freeholder was to sell the freehold to a different freeholder, you are usually offered to buy a share of the freehold before this happens though so you would have prior warning to it
Lease hold Properties are Fine as long as there is no Ground rent or service charge , its if the ground rent goes above £250 and you default on paying the Ground rent , then the lease holder can Re posses the property this is very very Rare though . But this is hopefully going to be overturned in Government this year with a new Bill. I own a lease hold property with 992 years left on the lease . There is no Ground rent and no service Charges . so Its no problem at all .All Flats are lease hold , so don't be put off of buying a lease hold property , Just don't Buy one with a Ground rent , and if possible a maintenance Charge . Although Maintenance charges are common in Blocks .
I agree, if you can find leasehold properties that don't have either that is, as there isn't many, glad the situation is different for you.
@@NicoleSage I am checking a leasehold detached house for 400k, and it says no ground rent or services charge was collected. can they start collecting in future? what would be the charges if someone wants to buy the leasehold. Could you give me details on it? My friends suggested to stay away.
@@Rajvtube I think you need eyes wide open for a leasehold which hasn't been collecting anything, I believe they can back date 6 years but it has to have been demanded at some point. Ideally, you need to find out who the freeholder of the property is to get info on the lease before proceeding. Yes - you can buy a share of freehold, this can vary in cost and is usually calculated on years of remaining ground rent and a premium so would be a bit trickier in this case. It could cost £100s or £1,000s depending on this. If the current seller doesn't know who the freeholder is or has a lease, they can request this through the land registry for a few pounds, hope this helps.
Yes I Bought a free hold house but the Ground it stood on was not mine in the free hold of the house It came with at first a pepper corn rent and service to pay which went up in the first couple of years I lived there and I was surprized I managed to sale it I was honest about it and told my buyers the truth so no guilt on me as I believe what goes around comes back to bite you, So I was so glad to get rid of it it was a Bellway house and I really hope they pulling this sort of scam Karma bites them and they go out of business, I know in a way it was told to me but I did not realize how much it would rise , and how can you Buy a freehold House but not the land it stood on
What a nightmare, it's shocking that this was allowed to happen with houses. This is not allowed to happen anymore with new build houses luckily, but retrospectively so many are affected.
I bought a flat leasehold , I’ve ended up director of the management company :-/ , we have a problem person in the first flat and she has made it and is still making it a nightmare. She was stealing money from the house funds (£1300, it was more ) and everything is an absolute pain because of her , we only pay £40 to £50 per year ground rent and the service charge is only £68 and she still refuses to pay the same as everyone else :-/ , we had to take her to court for the £1300 , it only cost £1700 🥳🤯😳😵💫 , have a heart for those like me who have ended up managing a house and don’t want to :-/ never again 😳
I totally feel for your position, whilst everything is out of control with a managing agent there is no way I would want to take it on personally because of the issue you have just outlined, it’s important for people to see this side of it too as buying share of freehold isn’t always the answer, well done for fighting it and hope you don’t have anymore issues in the future!
I am about to buy a leasehold flat. Is a bit confusing about what you can and cannot do in your flat without permission.
Basic rule of thumb - you can't do structural alterations inside your flat unless you have permission, decorating is fine, even if it's a new kitchen being installed I believe you have to ask. Pets, you have to ask for permission too. Let me know if you have any other specific questions about alterations and I'll do my best to help
I need advice. I wanted to sell my shared ownership property. 50%. I filled the forms. But had not received management pack yet. The pictures were taken. No solicitors had been engaged yet. I decided to not sell.. But lo and behold I am now requested to pay 1140. I had not even engaged any lawyer. Any advice?
That sounds about right from the management company, if there is an email of you instructing them and correspondence back from them there's nothing you can do unless you advised them to stop the process. There's little to get around management companies like this unfortunately. I'd also recommend posting in the national leasehold campaign group on Facebook as someone may have gone through the same thing, thanks.
People who complain about the UK, go check Germany. Buying costs as first time buyer are between 10% and 12% of the property price. Yes 12% !!! Imagine you buy a property and you are already making a 10% loss on it
Is this for a deposit?
@@NicoleSage nope, just legal feels, commission and tax
Wow that is terrible, you'd probably pay may £3k max for legal fees for a flat purchase in the UK, a lot more to sell but nothing like Germany, thanks for sharing@@Mehdital89
NEVER BUY a LEASEHOLD Property.. I luckily got rid of my flat back in 2015 because of ridiculous Service Charges. I pulled out of 4 other Leasehold properties because of problems. In the end I paid another 40K & bought a 2 bed house instead. Best decision I ever made.
You literally are better off renting than buying a leasehold property.
So glad you got out of leasehold and are in a house now, best advice - just don’t do it!
@@NicoleSageI believe freehold properties that are built on new developments also have to pay service charges if the council doesn’t manage the shared space
@@ghgfrghfrhgdxvgredghhgvfth1573 You'll get all that information from yr Conveyancing solicitors. If U don't understand anything then ask, as that's what ur paying them for..
@@robh8814 true tho I believe freehold houses on new build estates generally pay service charge fees. If this is the case and a management company manages the estate the buyers solicitor normally requests a management pack to gain an understanding of year end fees as well as additional information regarding fees charged by the landlord/management company. Plus I don’t think freehold houses on estates don’t have as many legal rights as leaseholders when it comes to SC fees.
Did you feel guilty for the buyer of your flat? Knowing all the issues you encountered were going to be inherited by the buyer?
From what I understand the buyer was actually an investor doing a buy to let, so no I don't feel guilty but regardless or not, I would not hold the leasehold burden for the rest of my life as to avoid passing it onto someone else who actually wanted the property. Leasehold reform may be coming into effect in November following the King's speech anyway
Why does anyone buy a leasehold property?
I'm working class, from the north and in an unskilled job yet I was taught growing up in the 80s never to touch leasehold property in any way and that it's nothing but a scam.
After leaving university I actually had the sense not to follow the rest of the brain drain migrating away from our villages and towns to our cities. This means that though I'm only earning 30k a year in a none professional job, which is a high wage for the town I live in, I managed to buy my own freehold three bedroom semi detached house on a single person mortgage at a mortgage repayment amount of £250pcm.
The golden rules are, firstly don't let your heart rule your head and secondly read everything and make sure you understand it before you sign anything.
Then if you don't like something about it, then have the courage to walk away from buying it. That way you keep out of trouble to start with.
Yes, great advice. Unfortunately leasehold even in smaller cities is only possible for single income earners, totally depends on the city and house prices. You'd be lucky to get anything with £250 month mortgage where I live for a 3 bed house unless you put down a 60% deposit, plus factoring the interest rates of today There was never any education around leasehold when I purchased so always important to continue raising awareness for those who can only buy leasehold today and what to look out for.
So you are an old fart with a uselless degree? Dont come on here giving the bigun when you was lucky to get a cheap house and mortgage years and years ago you helmet. The world has changed..you had a grant to attend a Polly technic, you didnt move away as you had no other choices, your house and mortgage is LUCK. Thats all.
Your gona make the flat owners stuck with flat
Would the Leasehold and Freehold Reform Act 2024 (LAFRA) provide relief?
YES - however, since the election this may change what was initially passed. I have done an updated video on what that might look like for leaseholders here: ua-cam.com/video/zLZT85HHFfY/v-deo.htmlsi=K-yGPsdtQbTmwNot
I'm not going to lie. That was hell
I would like to know if I can be charged ground rent, if I pay monthly rent and service charge on a housing association flat. I keep getting letters asking me to pay over £3000 in ground rent. I do not own the property. I just ignore it and assume this must be a scam.
Yep you’re right to ignore it, If you don’t have a mortgage on the property or own it outright then you would not be liable for ground rent.
@@NicoleSage OK., thanks. Those letters are scary.
They sound horrible, if there is a number on there, maybe give them a ring to clear the issue up also@@kaxar6954
@@NicoleSage Yea, it from a law firm. But I never reaky checked if they are registeted. But will do.
The UK government will never outlaw leasehold and have stated that they have no plans to review or do so. Why?... because of the 'huge' annual revenue that it generates for 'them' in taxes.
There are national and international companies out there that their business model is solely built on, buying up freeholds from developers including the exclusive estate management rights from the developer, who has no problem selling it to them, has that finance goes towards their next planned development - and the cycle continues.
I lived in spain for a number of years and know that Spain does not have such a thing has 'leasehold' properties. When you purchase a house or in that matter an apartment, you own it outright (the walls, floors ceiling and everything constructed within it).
This has been an ongoing issue in the UK and many people are outraged buy it. Recently the UK government have now even gone as far has letting developers sell 'houses' with a lease!. Leasehold is a 'government scam' because they are the ones who have the ability yo outlaw it...but due to their own greed, choose not to.
Finally, adding to your issues of selling your previous home, with ground rent D.0.Vs and new development paperwork etc.
I recently reserved a new development apartment. I was offered to use the 'developers solicitors' ...which I declined, and informed them that I will be using my own.
On the outset my conveyancing solicitor found this £250 annually reviewed and measured against RPI immediately. We refused to proceed unless this was removed and set to zero (peppercorn). Which after a months of struggle the developer agreed to do, but we later found out that they had not got the mortgagees of their development consent or signature for the new D.O.V!.
Also, new developments come with a charge against them (the money lent to the developer by the lending bank to build the apartments etc) My solicitor instructed them that the charges had to be removed by the lenders (bank) solicitor prior to exchange of contracts. This they said could not be done prior, but would be done post exchange and completion (within months!???).
Also, with my solicitor being very 'anal' regarding correct documentation to protect me the buyer and not budging until he got it, the developer had said that their other buyers in the development had not raised the same issue or been so detailed has my solicitor had been. (etc, requested legal documents missing or not even provided etc) And the sole reason for this was because 90% of 'those other buyers had chosen to use the developers solicitors (presumably due to being told it would be 'quicker' for them or because of a financial package.....which is a big red flag and a 'no-no'.
Because when those present owners come to sell, there will be missing legal documents/ incorrect worded contracts etc which the new buyers solicitor will request, but unfortunately would never had been supplied by the 'developers solicitor' when the property was 'originally' purchased. Which most lenders will not lend on.
Thank you for your comment, couldn't agree more with you. I have seen more houses with 'leasehold' terms in the past few years, absolutely terrible. A system designed to benefit everyone other than the 'leaseholder'
Jcs: a cautionary tale indeed - never ever use 'their' solicitors -' they work for them and NOT for you ... 🙄🙄
Did you earn a profit selling your flat? Who decide on the price of the property?
Luckily I did because of the area but I still incurred over 5K worth of selling fees to push it through, the estate agent chose the price but it was pushed up as I sold just after Covid when the market was buoyant
@@NicoleSage but can you also rent out a leasehold property? I mean rent it out instead of selling, like a buy to let kinda thing?
Great videos. All the while, while you're chatting, I am thinking 'who the fuck actually took on the shit show that was your flat'? I nearly bought a leasehold up north but fortunately I saw sense, bought an old Victorian place and now walk around with a smug look on my face most of the time. Smug-smug.
Well done, I can say that’s the best thing you’ve ever done!! And I know, I think it was someone doing a buy to let!
I dodged a bullet thank God
Is a Share of Freehold better than a typical leasehold property?
Yes - share of freehold is always considered better if you can get it. It can still cause various issues though and when it comes to selling, but always a better option than standard leasehold.
@@NicoleSage why is it better?
@@kwekueghana3683 Because you don't have a freeholder that calls the shots/charges whatever they like, instead you would own a share of freehold, along with the other flat owners (typically), so you would all be responsible for the management of the property instead. This of course can come with its own problems though.
@@NicoleSage what problems could happen? I've currently saved 27k and I'm looking to get on the ladder but I've been put off a leasehold abit but can't find a freehold flat. I'm 26 and single so buying a house rn isnt that feasible atm
@@kwekueghana3683 If a large issue was to arise with the property that cost a lot of money to fix, there could be one of the freeholders that says they're not paying for it. If everyone has a mutual agreement then it's not a problem - just ensure you do your due diligence during the purchase property as you will be allowed to view the accounts etc for previous years.
Why is it so difficult to find a positive video about UK made by a British person?
Because we live in a miserable country.😂
I sold my flat in 2020 after trying for 4 years. The best decision of my life was to get rid of it.. It's a scam , no doubt
So glad you managed to get out as well, awful system
Council flat is ok
yyyyyyikes its way too complicated
It is!! I think they make it complicated on purpose so people don’t take the time to read through the small print!
Abolish leasehold!
ENDIMINITY POLICY'S ARE MONEY IN BACK POCKET OF
SOLICITORS NO INSURER WOULD
INSURE THE NONSENSE THE
SOLICITOR TELLS YOU
I am really sorry to say, but I don't agree with quite a bit on your video, you fail to see the other side. Your experience was n't great, but your view of the world is being tainted by this.
There are pro and cons to living in a leasehold flat. The service charge can be a downside.
Ground Rent - you resent paying this, but there are Ground rent from old leasehold flat from the 1970s, where the ground rent today is £25 per year. It is n't worth collecting and Freeholders disappear. This causes a huge number of issues. It is n't worth the hassle collecting. This is why I think they need have the Ground Rent at say £100 per year and rising with inflation. (The cap of £250 a year might be fine for 2023, but in 2053 with high inflation it may ground rent might be worth nothing).
Freeholder - is not allowed to make a profit. If the lift breaks down and the managing agents send someone to fix it for £1,000. Then they charge the residents £1,000. They can't add profit and charge £1,100, for their time and effort.
The only time, Freeholders can make some money is leasehold enquiries or extending the leases. Sometimes it is would be £200 for enquiries, but £800 is extreme as it was in your case. In some cases the Freeholder has to consult a solicitor for advice on certain matters (they have to read the lease and then advise accordingly plus the drama of KYC). However, LPE1 form has got fatter over the years. They ask a lot of questions. Freeholder is under not obligation to answer those questions. It is a burden on Freeholder's time. Freeholders can be held liable for any errors.
Freeholders to get a rough time, with leaseholders not paying service charge. There is a constant tug of war. Sometimes people don't pay for just reason (as in your electricity example), however, at others time, they expect a free lunch. Sometimes you get crooked Freeholders, who overcharge or get someone they know to carry out repairs.
Also, Freeholder can only go to big companies for repairs (who give invoice and respond to quotations). Small builders who are cheaper, just don't want to hassle of providing quotes for tenders or jobs they may not get.
You mentioned Airbnb - in your building. However, there may be leasehold restrictions about this. You would expect your Freeholder to do something, but then people resent paying ground rent (which is peanuts). Many managing agents charge around £250 per year per flat.
The Ground rent going over £250 is an over reaction. The government should have just have lifted the cap. There is nothing wrong with ground rent going up with RPI (which is fair), but doubling ground rents are problematic "in some cases". Some ground rent double every 33 years. So there is nothing wrong, as inflation would erode it. However, ground rent doubling every 10 years, could be nasty.
Electricity - blocks of flats get charged commercial rates for electricity not residential rates!.
Solution: In my opinion, we need leasehold reforms which are fair to freeholders and leaseholders. In my opinions, we need a not-for-profit managing agents and not-for-profit builders who help service blocks of flats. This will help reduce costs for leaseholders. It reduces risks for landlords. In large blocks of flats, we could concierge to bring down security cots. A lot of blocks of flats seem unloved. They have this system in France....
Both the video and your elaborate as well as insightful comment very helpful. I’m due to sign the contract this week but needing to pause, reflect and consult as ground rent is 250.00 doubling in 2028 . Thank you both so much. Suoer educational
Hyper: ... and you say it's not really a problem 🙄🙄🙄
Managing Agents certainly *CAN* make a profit - and do ‼️ They charge for their time, for questions, for Licenses etc. etc. I'm really not sur you know what you are talking about. Yes, there are some properties with ground rents as low as £25 a year, but these are becoming very few and far between. Newbuilds try to sqeeze as much money from you as they can ☹☹
Moneyed ones like her moans about ground rent you look as if she is short doesnt look like it its only once a year what do you expect naive but understandable a flat to me is only for Rent and even now hard going.
I think you’re looking for the word ‘hard work’ - I saved up and afforded all I could when I was 24, yes I was fortunate to live at home prior and save, I made a mistake but the reality is many people can only afford a flat on a single wage income if they are fortunate to buy rather than rent. Please think before you comment because it’s not fair before understanding someone’s situation.