Thinking of buying a leasehold property? Here are 4 things to look out for
If you are thinking about buying a leasehold property here are 4 things you should be aware of and look out for:
- Ground Rent
This is a payment you’ll need to make to the landlord/freeholder and is normally due annually. You should always check if the amount is above £250 outside London or above £1000 inside London and pay special attention in case it’s scheduled to increase during the duration of the term of your lease.
This is the legal term for the length of the lease. Some mortgage lenders will not lend on a property if the term doesn’t have more than a certain amount of years (usually 70+) left to run. You may find you will have to pay for a lease extension in the future just to keep your property marketable.
- Service Charge
This is sum paid (usually on a monthly basis) to a management company to manage common and/or shared areas. Amounts can vary from property to property and from year to year so, again, make sure you check the details before committing to buy.
- Hidden fees
Whether you are buying or selling you could very well find you need to pay additional fees to the freeholder and/or Management Company.
If you’re selling you will need to pay for information packs for any interested potential buyers.
If you’re buying you will need to pay notice fees and other fees in order for the Management Company and freeholder to agree to register you as the new owner.
There is no official regulation in this area so these companies can basically charge what they want. Our advice would always be to budget £1,000 to £1,500 to cover any hidden costs when buying or selling a leasehold property.
There are also a few other considerations to bear in mind but we can talk you through those should you find the property you are interested in buying or need to sell is a leasehold property.
If you would like to discuss the sale or purchase of a particular leasehold property please call Michael Likupe on 0113 399 3408 or email Michael at email@example.com.