Leekbrookgull
Well-known member
Quite a bit in the news today plus interesting topic on Radio2 and Jeremy Vine,seems nothing short of a legalised racket ?
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Leasehold property.
- Thread starter Leekbrookgull
- Start date
AmexRuislip
Trainee Spy 🕵️♂️
This is a legalised racket
Indeed. How they ever got away with it amazes me. The story of the ground rent being £10k a year by 2060 is disgusting. I get leasehold on properties that share land but for a house ??
Leekbrookgull
Well-known member
- Thread starter
- #4
Didn't John Fogarty write that ?
pearl
Well-known member
why would anyone in their right mind buy a leasehold house?
Unfortunately they have little choice in some cases/areas.
pearl
Well-known member
I thought only flats were leasehold?
Not so.
Currently housebuilders are holding the lease and hence the racket is exposed.
http://www.premierestateslimited.com/blog/the-history-of-leasehold/
The history of leasehold property ownership dates all the way back to the 11th Century and is still in use today. The term freeholder – which effectively means full, outright ownership of land – was used in the doomsday book of 1089 and the first leasehold estates appeared a few decades later in the Middle Ages.
In those times it was impossible for hardworking families to climb onto the property ladder. Land equated to power in the Middle Ages and powerful families wanted to retain ownership of their land whilst maximising their earnings from it. As a result of this, the concept of leasing was born which would allow others lower down in the social pecking order to work the land for a fixed period of time on the basis that they would pay for the lease through providing food and services to the landowners.
Up until the 1920’s the landowners (freeholders) still held a dominant position over their tenants. However, during this period legislation was introduced to hold down rents and restrict the right of landlords to evict their tenants. Landlords who were facing dwindling profits began selling long leases which typically ranged between 99 and 125 years on their properties as a means of generating more revenue without losing ownership of their land – and this was the beginning of the modern leasehold system that we know today.
From the 1950’s onwards there was a significant increase in the number of flats constructed which caused leasehold ownership to rise. Freehold ownership couldn’t be applied to flats because freehold property law requires a separate land boundary which can be seen on a map. As this wasn’t possible for a block of flats sharing the same plot of land, leasehold was the only method available to subdivide and sell properties in a multi-occupancy building.
The major drawback with this type of system for tenants was that when the lease expired, ownership of the land and property would revert back to the landowner meaning they could be threatened with eviction. Naturally, people were wary of purchasing a leasehold property and this prompted further changes to the law in order to protect tenants from losing their homes.
Even today, leasehold is by far the most common form of flat ownership. However, it’s still possible for a tenant to be evicted when their lease expires and the property to be handed back to the freeholder – although cases such as this are extremely rare. Legislation introduced between 1967 and 2002 now allows owners of leasehold houses (from 1967) and flats (from 1993) to extend their leases and secure their homes for an additional 90 years.
pearl
Well-known member
that's awful. win, win, win for the freeholder (of course). There's no justifiable reason for a house to be leasehold, maybe on a private estate, but then surely that would be rented.
I'm assuming this story relates to leasehold houses as appose to flats? Last time I checked Freehold flats were tough to sell as they are nearly impossible to get a mortgage on?
Thunder Bolt
Silly old bat
No, there are quite a few towns, where the council hold the leasehold of many houses. I lived in one for 9 years, with a very small ground rent of something like £9 a year. The council decided to sell the leases of the entire road to a London based company, but under some legislation or other, were obliged to offer us the freehold. I bought it (and it wasn't that much to purchase) so when the time came to move, the house was sold as freehold.
pearl
Well-known member
Thanks, I never knew this
I'm not aware it is difficult. My brother has brought quite a few on mortgage without issue.
Was that leasehold with a share of freehold though?
Thunder Bolt
Silly old bat
The Amex stadium is leasehold, as it's built on council land.
BensGrandad
New member
Arent most leaseholds initially a 99 year lease and obviously this lessens as time goes on and the property is sold.
If I remember rightly wasn't it for something ridiculous like 199 years and a pound a year?
BensGrandad
New member
Wasnt that one of the bones of contention about selling The Goldstone? Was that not leased to us by Clarkes Bakers on a long lease.
They don't have to buy it
Thunder Bolt
Silly old bat
They don't have to buy it
The problem with leasehold is that ground rent can be raised. In my case, it was going up from £9 or £10 a year to over £100 a year. I think buying the freehold was something like a grand, or just over, so when I got the opportunity to buy, I bought it. Yes, the house was sold, so I 'lost' money in that respect, but the selling price was higher, because it came with freehold.
It's much more common in the north, than in Sussex.