Buying my own place has taught me a lot of things. It’s taught me the importance of keeping paperwork organised, it’s taught me that housework and chores are never ending, and it’s taught me that I’m far less independent than I once thought.
Perhaps most devastatingly, it’s taught me that, despite spending years living the life of a recluse and saving for a deposit on my own place in a bid to invest in my own future rather than pay off a landlord’s mortgage, I’m still going to be paying a sum of money to a bunch of wealthy property tycoons each month.
I say this because I’ve bought a leasehold property.
Let me explain…
All properties in the UK are either leasehold or freehold
Every property in the UK is either considered ‘leasehold’ or ‘freehold’.
If you have a leasehold property, whether it’s a house or a flat, this means that while you own the home itself, you don’t own the land it’s built on. The land is owned by the ‘freeholder’ and you’re expected to pay ‘ground rent’ to the freeholder aka landlord on a monthly or yearly basis. In some cases, you may have an opportunity to buy the freehold for yourself, but this can cost tens of thousands of pounds.
If your home is a freehold property, you own the home itself and the land it’s built on. As a result, you don’t have a landlord and you won’t pay any ground rent charges.
Most leasehold properties also include maintenance charges
It’s common for homeowners in leasehold properties to pay maintenance charges too. These charges cover the maintenance of shared areas such as communal gardens, corridors, foyers and elevators etc. Even if you live in a house and don’t share anything with your neighbours, chances are your landlord will find *something* to charge you for, like window cleaning.
Landlords/developers are able to increase ground rent and service charges
When you purchase a leasehold property, you’ll be given a lease to read and sign. My lease is about 50 pages long, it’s written in complicated legal jargon, and a few pages in I started to cry because it said that I couldn’t make any “internal, non-structural alterations or additions to the Property without the prior written consent of the Landlord.” Thankfully, when I spoke to my solicitor about this, he helped me make sense of the lease and pushed for some changes to be made.
Too many home buyers aren’t reading their lease
When I received the lease for my apartment in early 2017, I did a lot of research before actually agreeing to sign it and hand it back to my solicitor. I did a fair bit of Googling, read tons of articles, and joined numerous Facebook groups such as National Leasehold Campaign. Numerous group members admitted that they didn’t read the terms of their lease before signing it and making their house purchase official. As a result, many of them are living in houses with completely unnecessary leases, strict rules when it comes to making changes to the property, and rocketing charges that are making their homes really difficult to sell.
Therefore, if you’re thinking of buying a leasehold house, please read your lease first. Tell your solicitor that you’ve heard about the ‘leasehold scandal’ and ask them to highlight any particular clauses that could cause problems further down the line. If there are any sentences within the lease that you don’t understand, ask your solicitor to explain them to you. You aren’t being a pain. This is literally your solicitor’s job.
It’s fairly normal for apartments to be leasehold, but there’s no reason for houses to be
Since multiple apartments are built on top of one another and they share communal areas, it kinda makes sense for flats to be leasehold. However, there’s no reason for houses to be lumped in the leasehold category and the only reason developers make them as such is so they can charge home owners a fee and benefit from a regular income.
I would really like to see leasehold houses abolished because they’re unethical, unfair, and simply a way for the rich to get richer while the working class remain tied to rocketing prices.
If there are less than 80 years left on the lease, stay well away
When I first started looking for my own place, I found a property that I really liked but was warned by the estate agent that there were only 80 years left on the lease. I didn’t really know what this meant at the time, but a quick Google search warned me that it could be difficult to sell the property because a short lease can affect the property’s value.
