Modern leasehold properties

[oldguy57]

Eldest son is in the process of purchasing a !0 year old property in Lancashire and I was surprised to see it was not freehold but on a 999 year lease which had just been renewed. GR is £75 pa. Friends in the same town have also been purchasing brand new homes which are also leasehold. I thought this had gone out with the ark but obviously not. Is this a north west phenomenon or more widespread. Are there advantages e to the landowner instead of selling the land to the developer or is it a case of the developer retaining the land and simply getting more out of it?

 

[Deleted member 6183]

I've always been fairly relaxed over leasehold, particularly 999 years, however my view has changed recently.
I know of a housing estate, built in the 80s, where the local authority is the landowner. The rent was always low until the LA increased it from £50pa to £400pa recently.

 

[markjay]

One advantage of being both the Freeholder and Leaseholder is that you do not need to seek Landlord's permission in order to make alteration to the property (though you still need to go obviously through the usual local council planning permission process).

If you intend to make alterations, extensions, ect, then not having to deal with a Landlord will save time and also reduce costs as professional Landlord's tend to have such requests reviewed by their Solicitor, Surveyor, and sometime also Architect, at the Leaseholder's expense - and a bill of several thousand Pounds is not unheard of (depending on the scale of the project).

But even if you do not intend to make any home improvements yourself, potential buyers might want to do so, and again not having to seek Landlord's permission will be attractive to them.

 

[oldguy57]

Thanks for those responses. One hopes that solicitors handling the conveyance will spot and highlight any potential pitfalls in the Agreement.

 

[davidjpowell]

What sort of property? House or apartment/flat of some description?

The former would be unusual, the latter not.

 

[Deleted member 6183]

What sort of property? House or apartment/flat of some description?

The former would be unusual, the latter not.

Good point, a freehold apartment could be very bad news indeed.

 

[flat6buster]

What sort of property? House or apartment/flat of some description?

The former would be unusual, the latter not.

∆ this. Freehold flat is a nightmare for obvious (who pays roof repairs/damp repairs) reasons.
When I had an agency I sold one freehold flat. Had to be cash no lender would touch it.

Leasehold sensible/normal when more than one property on the same piece of ground.

 

[oldguy57]

^^ No it's a standard 3 bedroom detached, which is why I found it strange. However as I said friends buying brand new homes off plan in the same town are faced with the same issue. Lenders do not seem to have a problem with it however. I am hoping conveyance solicitors will pick up any potential problems.

 

[scumbag]

is the leaseholder the Duchy of Lancaster?

 

[oldguy57]

^ That's exactly what occurred to me and may explain the unusual circs. Will find out if only to put my mind at rest.

 

[MD5]

As already said, a good thing for flats/apartments, but not so much for a detached property, both depending on the terms of the lease.

It may well be that the freeholder will have a clause which entitles them to a %age of sale price each time the property changes hand, plus whatever else they want to maintain governance.

 

[Darrell]

I am sure I read something this a while ago in the property section of a newspaper. It happens quite often in new housing.

Maybe the builder owns the land.

I will speak to my sister and her husband as they are both chartered surveyors.