Five Helpful Hints When Buying Leasehold Properties
If you’re looking at buying a flat, it is essential that you understand the pros and cons of leasehold properties, but even houses are increasingly being sold on a leasehold basis. That’s why you need to understand the following before you proceed.
This will directly affect the value of a property and can vary from 999 years to much less, such as 125 years. You do have a legal right to extend your lease, but this can be both expensive and complicated in some cases. The cost of extending it will generally start to go up considerably once the lease goes below 80 years, and mortgages can be much more difficult to obtain.
It only costs £3 to check on the Land Registry site to see who owns a freehold. Some apartments are sold offering a share of the freehold. This normally means that you will get shares in a company owning the freehold.
The process of enfranchisement means that you can have the right to buy your freehold after you have owned your property for two years. Apartment owners have to club together, but house owners can carry on as individuals. Professional advice is essential, however.
Some properties will have just a peppercorn ground rent of just £1 a year, but others will have higher starting rents and involve regular increases. Some will be linked to the official Retail Price Index.
Flat owners with leasehold properties will usually pay service charges to cover maintenance. Some houses on private estates may also incur service charges to cover the upkeep of common areas like playgrounds or verges.
Look out for any ‘major works’ bills which may be on the cards for such things as the decoration of communal areas of a building or a new roof, as this can involve a substantial outlay in some cases.
Make sure that you read the small print regarding your lease before signing on the dotted line. Some leases may state that you are eligible for fees for regular carpet changes, for example, and others may ban subletting or satellite dishes.
Nevertheless, leasehold properties can make a great investment, offering outstanding value for money and removing the need to worry about maintaining complete properties. To find out more about the current Leicester leasehold opportunities, speak to a member of the Keywest team for all the up-to-date advice you need. Call us today at our office at Hinckley Road 01162 544 555, or Queens Road 01162 544 543.