In message , tim..... writes
Ah! Sorry. It was a url that came up in a search on *commonhold* the Bretherton explanation seemed simpler and more understandable than the Wiki version.
This may become clearer shortly as my wife is selling a flat which was originally leasehold.
It wasn't the URL part of the link, it was the descriptive part, which happens to look like a truncated URL, but isn't clickable, I suspect you meant this ...
That's the one:-)
Don't overlook that if you own a property you are responsible for maintenance, insurance etc
A flat is almost always leasehold, you certainly wouldn't want a freehold flat. The lease is the legal device that obliges everyone to contribute to maintenance et. There is also commonhold, but that has not been taken up much and offers no real benefit over a leasehold with share of freehold arrangement.
If you buy a leasehold and stay there for two years you will acquire a statutory right to an extension of the lease to 99 years with a peppercorn rent. Renewing the lease gets more expensive the shorter it gets, which is why you will sometimes see very cheap flats for sale which turn out to have a short lease. If the flat has more than 70 years on the lease then getting a mortgage should not be a problem, and extending the lease should not be a significant outlay. Some flats are sold with 'share of freehold' in which case the lease may well be 999 years.
When I bought my flat thirty years ago it had a 99 year lease, I didn't expect to be there more than five years. But we (the leaseholders through our management company) bought the freehold at that time, so when I put the flat on the market last year and a 68 year lease seemed to be a deterent for some buyers it was easy enough to extend every lease to 999 years.
No Commonhold is a new fanged thing that was supposed to replace the Leasehold with share of freehold through membership of Management Co. It has the disadvantage of being new and lawyers are wary of things untested by case law. It really doesnt offer any benefit over the Management Co method. You save the £13 a year it costs for an annual return to Companies House but you will still need to keep proper accounts in case HMRC call.
+1
A good place for advice
The Leasehold Advisory Service
There is a statutory right to a lease extension if you have lived there over two years.
The cost of exyending a lease is calculated base on the value of the future ground rents and the 'reversion' that is the value of the property when it returns to the freeholder at the end of the lease. ie the present value of an income of [ground rent] for X years plus the present value of a lump sum payable in X years
True, buying an ex LA flat only makes sense as an business/investment by someone who can setoff the service charge against a rental income.
But note that legislation giving a right to renewal (albeit at a price) means that reversion may not happen
Note that there is a lot of legislation that regulates Service Charges, so it is not that one-sided. I have managed my Flat Management Company/ Freehold since it was set up thirty years ago. No-one else want's to take that job on, and even if I were not selling up I would be looking to appoint a Managing Agent to take over, the red tape has become just too onerous.
In article , djc writes
Whilst it is pretty clear that this example is in England you might want to lift the blinkers and acknowledge that in other parts of the UK (_uk_.d-i-y) that this is not the case. As pointed out already in this thread, Scotland is a notable exception.
Well, sooner you vote for independence and go your own sweet way the better.
no, it's a 90 year extension at a peppercorn rent.
In most cases the FH will instead offer you a new 99 year lease at a "modern" (i.e. higher) rent at about the same price as you could enforce the statutory extension on the "promise" of not contesting your right to the new lease.
Usually, you are foolish to accept this offer, but many do
tim
I have a leasehold flat (2 bed) and a friend of mine has one too, we are both thinking about increasing the lease on the flats. These flats are in East lodon current selling price it arount 250-300k each both 2 bedroom. The leasehold on one has about 56 years left adn to increase the lease to I think 115 years is going to cost about 25k excluding solicitors fees. The ground rent on this property is 100 per year which will increase to about 500 a year once the new lease is brought in. Not sure on my property still trying to find out.
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