leasehold

[Steve]

I was trying to explain the concept of leasehold to my mum earlier, and she asked an interesting question.

Say I pay £150,000 for a house on a leasehold (for instance a 10 year lease - I know most are more than this but there was one on telly earlier). The landlord decides he wants the land back and doesnt renew the lease. What happens to the money I paid for the house? Does he have to buy it back from me? Or have I lost the money?

Is leaseholding just a money making exersize? I dont see the point.

 

[stem]

Leaseholds are normally used where several dwellings are built on the same piece of land such as flats or apartments. They can't all own the same piece of land, so the owners of the properties all pay a share of a ground rent to the freeholder.

I looked into this some years ago when considering buying a leasehold property. From memory, I believe you can legally force the owner of the land to increase the length of lease after you have lived in the property for 2 or more years, providing that the lease has not already expired, and that you did not take the property on with a short lease to start with. Hence why people extend the lease while there is still a long period left and most leases are for many decades. 10 years would certainly ring an alarm bell. Also, I think you are right that if the lease does expire the property does revert to the freeholder.

A lease extension is best handled by a solicitor who will serve notice on the landowner and negotiate the terms etc.,

 

[Lincsbodger]

I was trying to explain the concept of leasehold to my mum earlier, and she asked an interesting question.

Say I pay £150,000 for a house on a leasehold (for instance a 10 year lease - I know most are more than this but there was one on telly earlier). The landlord decides he wants the land back and doesnt renew the lease. What happens to the money I paid for the house? Does he have to buy it back from me? Or have I lost the money?

Is leaseholding just a money making exersize? I dont see the point.

The house becomes his property. Unless ofc you want to disassemble it and reassemble it somewhere else. He can then do what he likes with the house, including live in it or tear it down or sell it with the land as freehold.

srsly

 

[stem]

Unless ofc you want to disassemble it and reassemble it somewhere else.

That could be tricky if it were a flat on the 1st floor of a 3 storey block

Actually I don't think you even own the bricks and mortar, you just get the right to occupy the property for the years and pay a small ground rent.

 

[Steve]

Actually I don't think you even own the bricks and mortar, you just get the right to occupy the property for the years and pay a small ground rent.

But surely if I lease an empty plot and built a house there, the building would belong to me, if not the ground? Thus when the lease expires I can take the building away with me? I know mortgage companies dont like leasehold properties. Can see why!

 

[big-all]

just club together with the other lease holders and buy the freehold

http://www.direct.gov.uk/en/Dl1/Directories/DG_072537

 

[stem]

But surely if I lease an empty plot and built a house there, the building would belong to me, if not the ground? Thus when the lease expires I can take the building away with me?

That's might apply to just leasing land, but you were asking about a leasehold property.

Link here to see Land Registry definition. You can stay in the property as a tennant when the lease expires, but it aint yours. Hence why I looked into it but didn't take a leasehold.

 

[JohnD]

there are a few despicable characters who make a fortune out of buying the freeholds, very cheap, of leasehold properties and taking care not to demand Ground Rent from the leaseholder (it is the leaseholder's responsibility to pay it) or remind him as the lease approaches expiry, then getting possession of the house and land.

btw if you have a property with a long lease, you can usually buy the freehold very cheap, and save yourself a lot of trouble.

 

[Lincsbodger]

Actually I don't think you even own the bricks and mortar, you just get the right to occupy the property for the years and pay a small ground rent.

But surely if I lease an empty plot and built a house there, the building would belong to me, if not the ground? Thus when the lease expires I can take the building away with me? I know mortgage companies dont like leasehold properties. Can see why!

Yes, it your building on his land. When the lease runs out, you can take the building with you or leave it for the landlord. But unless its a prefabricated building, how are you going to take it with you.

It can get even worse, in that there might be a clause where you have to pay to have the site cleared when you're done. So not only do you lose the house, you then have to shell out £50k to have it demolished.

 

[conny]

My house originall had a 999 year lease on it when it was built around 1945. The lease was 1 peppercorn per annum.
So far I owe them 14 peppercorns.

 

[Nige F]

It IS a licence to print money the free holders and the managing agents are crooks . Just look @ the blocks of flats in God`s waiting room seaside towns ..Not when our generation gets to 65 years + I would say generally, we know too much - in fact the tide might turn and we get consortums of " tenants" moving in the flats then buying out the theiving bastard freeholders when the number of tenants that want to buy per block reaches the legal limit and the S.O.B`s Have to sell @ market value. . Give it 20 years .

 

[Lincsbodger]

It IS a licence to print money the free holders and the managing agents are crooks . Just look @ the blocks of flats in God`s waiting room seaside towns ..Not when our generation gets to 65 years + I would say generally, we know too much - in fact the tide might turn and we get consortums of " tenants" moving in the flats then buying out the theiving b*****d freeholders when the number of tenants that want to buy per block reaches the legal limit and the S.O.B`s Have to sell @ market value. . Give it 20 years .

See thats the cool thing about us Baby Boomers. Were the most influential demographic cohort ever to live. We reinvented the teenager, we invented Protest, we invented Sex'n'Drugs'n'Rock'Roll, we invented the Swinging Sixties and Progressive Rock, and were going to reinvent the pensioner.

 

[Nige F]

Dam` Right

 

[JohnD]

all because the oldies vote, and the silly youngsters don't

so who do the politicians try to keep sweet? The people who keep them in a job.