Author Topic: Leaseholds and other even worse partial ownership bollocks  (Read 1791 times)

Leaseholds and other even worse partial ownership bollocks
« on: June 06, 2021, 02:01:38 PM »
Anyone got one of these? Has it been okay or bad in ways you didn't anticipate (e.g. being forced to follow bullshit rules by the freeholder). I could probably manage to get an okay leasehold two bed flat at this stage but I find the idea of not totally owning the thing fucking horrific, especially with the issues post-Grenfell. Even just figuring out what a fair price relative to a freehold seems kinda hard to wrap my head around.


Then shared ownerships? How do people even offload that kind of thing if they want to get rid of it? Be forced to sell on the co-owners terms (i.e. ideally back to them on a cut rate?)


madhair60

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #1 on: June 06, 2021, 03:18:51 PM »
yeah there's this one guy who co owns with a friend but the friend went mental or something turned into a cunt, have a click around and you might turn it up , was posted quite recently

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #2 on: June 06, 2021, 03:20:35 PM »
I work in conveyancing please don't ever buy a leasehold property or enter into a shared ownership agreement regardless of how tempting it may seem upfront. Cheers.

Re: Leaseholds and other even worse partial ownership bollocks
« Reply #3 on: June 06, 2021, 11:01:54 PM »
Probably one for the "how stupid are you" thread, but I used to think shared ownership meant you had to share the house with some other random bozo living there. Which is obviously not very appealing.

Can anyone explain, in layperson thicko terms, just why it's so bad? I know with a lot of new builds in the UK (of the type which are largely offered in shared ownership schemes), owners get fucked by cladding issues where they're trapped in a flat they have no way of selling, which is of course awful. But is there something inherently bad about not fully owning the property?

Like, what if that's the only way you can afford a deposit for your own place, and you just want to live somewhere where you can paint the walls and hang up a few pictures and get a pet if you want, rather than treating it as a big investment? Is it still a problem then? Or is it more the fact that lots of these schemes also include lots of extra monthly costs like building maintenance fees and the like?

Gurke and Hare

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #4 on: June 06, 2021, 11:49:09 PM »
Like, what if that's the only way you can afford a deposit for your own place, and you just want to live somewhere where you can paint the walls and hang up a few pictures and get a pet if you want, rather than treating it as a big investment? Is it still a problem then? Or is it more the fact that lots of these schemes also include lots of extra monthly costs like building maintenance fees and the like?

Well, they'd include maintenance fees even if you owned them 100% - in fact, with shared ownership they should be lower, as the party that owns the rest of the property should have to pay the appropriate share. I don't have any idea, but I suspect one of the drawbacks is that you get landed with 100% of the things that if you were just renting would be the landlord's problem. The main problem seems to be that if you want to sell it they aren't always easy to sell.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #5 on: June 07, 2021, 02:17:19 AM »

I own a big house, with my wife!

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #6 on: June 07, 2021, 06:49:01 AM »
I don't know much about it at all but one problem I think is that the idea was that you start out "owning" a portion of the property and you can buy a bigger and bigger share of it as your salary increases until you buy 100%. Of course the obvious problem comes when your salary doesn't increase, or even if it does it's not enough to buy the whole house, and as others have said if you want to sell at some point it'd be difficult.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #7 on: June 07, 2021, 06:57:55 AM »
yeah there's this one guy who co owns with a friend but the friend went mental or something turned into a cunt, have a click around and you might turn it up , was posted quite recently
That'll be me:
https://www.cookdandbombd.co.uk/forums/index.php/topic,86372.msg4556720.html#msg4556720

Two and a half years, we've been trying to move out...

As for leasehold, don't.

Uncle TechTip

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #8 on: June 07, 2021, 09:15:39 AM »
I own a big house, with my wife!

Yeah but it's made of wood.

Evil Knevil

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #9 on: June 07, 2021, 10:33:25 AM »
Shared ownership can be a bit pro and con.

Think the main cons are, as noted, you are effectively responsible for 100% of the maintenance and of the service charge although you might only own 25% of the actual equity, although counter to that is that your landlord is usually a housing association so they're not quite so mental about overcharging and have the resources to have a sinking fund or make loans or ok payment terms in case there's really significant major works that you can't afford. However, these days quite a lot of these schemes are being bought up by private equity lads so you're likely to get penny pinching etc (they try to get the max legal service charge they can from you and disburse the minimum they have to in maintenance).

The other issue is again on remarketing them-- you effectively have to let the landlord remarket the property first for a period of time (usually 2-3 months) before you can attempt to sell it yourself.

Notionally, most of these are treated as a form of affordable housing ('low cost home ownership') so there might be limits on who you can sell to, max income tests for buyers etc, which have to be exhausted first before you can try to sell to the public generally- this makes moving out a bit more difficult, although leasehold generally is slower to sell due to the extra paperwork and information needed (the conveyancer above might be able to say more!). It's also the case that, as affordable housing, there is likely to be a restriction on subletting without landlord consent, so you can't just let it out if you need to move out for a while.

There's also a slightly abstruse legal argument that you have less security-- the landlord could kick you out if you fall more than 2 months behind in your rent: https://www.leaseholdknowledge.com/shared-ownership-a-misnomer-that-can-be-worse-than-renting-and-worse-than-leasehold-says-solicitor/ although I don't think they usually go down this route.

Final point is that not all banks lend on shared ownership-- particularly if its in a tall building, so you've less of a mortgage market to access.

Pro is of course that you get onto the property ladder and get to benefit in a share of the uplift (inflation in house prices) when you sell later. Problem of course is that whereever you're planning to buy next has probably inflated in price too!

I think from experience, not many people actually go on to 'staircase' their equity, e.g. move from 25% to 50% etc etc, and actually sell on instead, as you basically have to save up the money for the additional share yourself and saving x thousand pounds isn't easy.


Evil Knevil

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #10 on: June 07, 2021, 10:36:47 AM »
Also- avoid anywhere (ordinary leasehoild or leasehold shared ownership) that has lifts. Fucking disaster now and forever.

Re: Leaseholds and other even worse partial ownership bollocks
« Reply #11 on: June 07, 2021, 10:41:49 AM »
I work in conveyancing please don't ever buy a leasehold property or enter into a shared ownership agreement regardless of how tempting it may seem upfront. Cheers.
Able to expand on the issues with leaseholds beyond a grenfell style nightmare? I get the impression basically anyone under the age of 40 who isn't loaded and wants  to live within zones 1-3 of London has little choice but a leasehold

Blows my mind so many are listed on places online without explicitly stating the date of the renewal, it's pretty fucking obvious when the place is half the price of similar places in the area that it's gonna be shockingly short.

Also- avoid anywhere (ordinary leasehoild or leasehold shared ownership) that has lifts. Fucking disaster now and forever.
Requires collective action from everyone in the building to force the freeholder to sort them out?

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #12 on: June 07, 2021, 10:45:47 AM »
Also- avoid anywhere (ordinary leasehoild or leasehold shared ownership) that has lifts. Fucking disaster now and forever.

...because they break down a lot and are expensive to repair? And people vandalise them and piss in them?

Evil Knevil

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #13 on: June 07, 2021, 10:54:21 AM »
...because they break down a lot and are expensive to repair? And people vandalise them and piss in them?

It’s the breaking down and taking ages to repair, and the fact that they’ll pay out for a temporary fix that lasts 1 month x 12 times over rather than a permanent fix that makes a large capital cost. Then they’ve got to think about suing the design consultant, builders etc and that adds to costs and delay. Also tenants arguing if they should pay or not— if you live on the ground floor why are you paying service charge for the lifts etc?

Re: Leaseholds and other even worse partial ownership bollocks
« Reply #14 on: June 07, 2021, 11:01:17 AM »
...because they break down a lot and are expensive to repair? And people vandalise them and piss in them?
Yeah, front door locks and entryphones seem to be difficult enough to coordinate repairs, I dread to think how big safety-critical machinery would work. But even in quite nice blocks they seem to be out of order more often than not.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #15 on: June 07, 2021, 11:05:27 AM »
Yeah, front door locks and entryphones seem to be difficult enough to coordinate repairs, I dread to think how big safety-critical machinery would work. But even in quite nice blocks they seem to be out of order more often than not.

The building I work in is a shade over ten years old and the lifts break down all the fucking time.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #16 on: June 07, 2021, 05:25:51 PM »
So all those saying avoid leasehold (and I agree from my naive part just about house ownership), does that mean steer clear of flat ownership in general? Because I was under the impression that it freehold flats aren't really a thing, and some mortgage providers won't even lend against them.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #17 on: June 07, 2021, 05:36:04 PM »
I live in a modernish 4 story tenement and the lifts have been fucked in all but one block for the 3 years I've lived there. The maintenance firm did fuck all about it for ages but there have been people peering into them occasionally, they also spent months repainting the outside front/back a brilliant white, presumably they got lobbied into this by owners wanting to sell/landlords as it really makes little difference to the quality of life to the people living in it unlike other internal works.

Every time I've bumped into neighbours after they've moved in and they've mentioned the knackered lifts and every one whether or a buyer or a renter had been given the implication they'd only recently broke and were on their way to being fixed. In one case this was a buyer of a flat followed not long after by the owner's tenant so it's nice to see the lie pay itself forward.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #18 on: June 07, 2021, 06:02:01 PM »
freehold flats aren't really a thing, and some mortgage providers won't even lend against them.

Yes, most mortgage lenders won't give a conventional mortgage product on a freehold flat, or 'flying freehold'. At our firm we pretty much uniformly close cases and inform client lenders on occasions when we receive instructions to work on such properties.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #19 on: June 07, 2021, 06:16:46 PM »
I find the idea of not totally owning the thing fucking horrific, especially with the issues post-Grenfell.

That in itself should be a good enough reason not to get a leasehold. But as others said, just don't. There are just so many things that can go wrong, and even if everything is great with your freeholder when you buy, who knows what will happen 10 years down the line?

A mate of mine has a flat that has the same cladding as Grenfell and can't sell it until it's sorted out which looks like it will take a few years.

Re: Leaseholds and other even worse partial ownership bollocks
« Reply #20 on: June 07, 2021, 08:08:58 PM »
So all those saying avoid leasehold (and I agree from my naive part just about house ownership), does that mean steer clear of flat ownership in general? Because I was under the impression that it freehold flats aren't really a thing, and some mortgage providers won't even lend against them.
Aren't most flats in London bought as investments, rather than actually to live in? In which case you want to minimise maintenance costs and then sell it on.

Re: Leaseholds and other even worse partial ownership bollocks
« Reply #21 on: June 07, 2021, 10:39:18 PM »
Aren't most flats in London bought as investments, rather than actually to live in? In which case you want to minimise maintenance costs and then sell it on.

Pure stone cold deso there but unfortunately it's true. ARGGHH hate it.

I have a few friends in the following position: currently renting in London, but have been able to save enough over the years for the (smaller) deposit required for some of these shared ownership places in London (as in, they want to actually live here - god forbid, given that they've lived here for years and most of their friends/work/interests etc. are based round here). Not a bad position to be in, you'd think, if they can afford the monthly repayments, but even then it sounds like they're basically screwed.

They're not arsed about making an investment, they literally just want to live somewhere where they don't have to deal with flatmates/worry about getting evicted with two months' notice/be able to paint the walls, etc. (though it sounds like you're not necessarily off the hook with the last two anyway. And someone I work with had to ask for permission to get a dog in the leasehold flat she and her partner live in, though in their case it was granted.)

Edit: obviously a potential answer to some of these issues is better tenants' rights and affordable rent... but that's another thread.

Re: Leaseholds and other even worse partial ownership bollocks
« Reply #22 on: June 07, 2021, 11:49:50 PM »
I can has service charge? It's true Heckin' Pauperinos may have to live somewhere smol, and ground rents may make them do a frighten but in overcrowded accommodation there's even more fremdos to boop da snoot. Exposed wiring makes pauper go BUZZ! Adulting is hard, but Oh yoy, Heckin' Jenrickino gonna send all my munnies onna beach holiday to the cayman islands, have fun! 

Evil Knevil

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #23 on: June 08, 2021, 03:32:36 PM »
That in itself should be a good enough reason not to get a leasehold. But as others said, just don't. There are just so many things that can go wrong, and even if everything is great with your freeholder when you buy, who knows what will happen 10 years down the line?

 

I think it really depends on the freeholder- some are professional businesses or housing associations and there's a benefit there that they might be able to get services cheaper (classic example is their building insurance is x10 cheaper than if you were to get it yourself) but the issue mainly is that you put yourself at the mercy of, and have to deal with, some third party in relation to the place you live, which I think strikes most people as a nuisance or worse for good reasons.

A mate of mine has a flat that has the same cladding as Grenfell and can't sell it until it's sorted out which looks like it will take a few years.

There's all kinds of things, lifts (as mentioned), cladding, fire safety generally, asbestos, even responsibility for repairing shared parts of the building.  When I lived in a small block of flats (4 flats) I had to take my freeholder (a large, well known Housing Association) to court to get them to stop asking for money from the 3 leaseholders to replace the windows and fence in the single social housing flat they still owned. I won because they hadn't read the leases properly and just assumed they could recharge for whatever they fancied, but everyone else I know on the estate ended up paying up I think.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #24 on: June 08, 2021, 05:09:39 PM »
That'll be me:
https://www.cookdandbombd.co.uk/forums/index.php/topic,86372.msg4556720.html#msg4556720

Two and a half years, we've been trying to move out...

As for leasehold, don't.

Fucking hell that’s rough.

Re: Leaseholds and other even worse partial ownership bollocks
« Reply #25 on: June 09, 2021, 01:16:50 AM »
I rented a leasehold flat for a few years. It was a nice location but controlled by a property management company which meant that even if you owned your own property,  you had to abide by their arbitrary rules such as nothing other than vehicles to be stored in garages and no hanging clothes on the balcony. First, after a month or so of living there, there was a complaint that I had two cars parked in the car park, along with my motorbike. This gave me an overbearing sense of being watched, whoever made the complaint knew exactly which vehicles belong to whom and how many of them there were. Then a couple of years later we decided to get an indoor cat, after about a year of having this harmless elderly cat who pretty much just sleeps all day,  we got another message from the management company demanding that we get rid of the cat. The landlord was actually fine with us having a cat, but the management over rules the "owner" of the property. They must have seen him sleeping in the window and grassed us up. These cunts actually tried to make us get rid of a cat in the middle of a pandemic. I didn't get rid of the cat, I put pet gates in the windows so that he could not be seen by prying eyes while we went about getting our own house. Now the cat lives happily in a place where nosy twats won't trouble him. Hopefully I will never have to get a leasehold again.

FerriswheelBueller

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #26 on: June 09, 2021, 02:10:27 AM »
Can someone explain for the resident dunces what a leasehold is? Is it just people “buying” the right to live in the property for X years, and then paying some kind of stipend while being overseen by the actual freehold owner (who owns it forever)?

It all seems a bit feudal to me, but I am massively ignorant on all this so my opinion is worth very little.

Re: Leaseholds and other even worse partial ownership bollocks
« Reply #27 on: June 09, 2021, 05:04:13 AM »
I'm not a expert but basically a freehold means that you own the property and leasehold means that you "own" let's say, a flat but you don't own the ground that it stands on or the building that your flat is contained in, and as such there is a property management company above you who have a set of rules in place and will tell you that you can't keep a pet in "your" flat and will tell you that you cannot alter the exterior of your flat in any way. Great if you like being spied on and micro managed while living to a predefined set of rules, not good if you want to put a shed outside your ground floor flat.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #28 on: June 09, 2021, 08:15:26 AM »
It's like renting with increased liability. Unfortunately, it's fast becoming the only way to 'own' the place you live in if you live in London.

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Re: Leaseholds and other even worse partial ownership bollocks
« Reply #29 on: June 09, 2021, 08:28:11 AM »
Practically the only way to "own" a flat anywhere in Wales or England. Commonhold is basically non-existent, isn't it? (Or routes to something like it by other means - e.g. shareholding in a co-op that owns a building and provides exclusive right-of-residence to a particular flat.)

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