Leasehold, why so expensive?
If a property is leasehold, why do the ground rent and service charges for some properties have to be very expensive? i saw a flat today and these charges were £1300 per year, where as others as low as £100 a year! Surely, it cant be that expensive to maintain a building, or are some private companies just greedy?
Answers:
Leasehold, in lamens terms, means that you have paid your rent all at once for a set period. You do not own the property perse. After the lease has ran out the property reverts back to the freeholder, just wanted to make that clear from the start. Service charges vary because what services they carry with them vary, for example one place may include maintaining the car park, garages, communal areas etc. while another place may only include lighting the stair wells! Always check what is included and what you get for your money. Ground rent is paid to the freeholder to recognise his ownership of the property and is usually a nominal amount.
some flats services include roof fund, lighting in communal areas, window cleaning, cleaning communal areas and decorating usually every 3 years. these are dear but do keep the properties looking nice and in good repair. best bet would be a maisonnette where you only pay ground rent ie: £100 usually but do your own maintenance. sometimes you need a second mortgage to pay service charges.
This is because with a leasehold, you own the building NOT the land it sits on. Many people made use of this loophole some years ago and bought lots of leasehold land. They are now making a lot of money in rent. There is not enough legislation for rent limits, they can, in theory charge what they like. But they cannot change it whilst you are living there. Most keep the rent low enough to make living in a property on the land viable. If you don't like the idea of ground rent then opt for a freehold property. Good Luck
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Answers:
Leasehold, in lamens terms, means that you have paid your rent all at once for a set period. You do not own the property perse. After the lease has ran out the property reverts back to the freeholder, just wanted to make that clear from the start. Service charges vary because what services they carry with them vary, for example one place may include maintaining the car park, garages, communal areas etc. while another place may only include lighting the stair wells! Always check what is included and what you get for your money. Ground rent is paid to the freeholder to recognise his ownership of the property and is usually a nominal amount.
some flats services include roof fund, lighting in communal areas, window cleaning, cleaning communal areas and decorating usually every 3 years. these are dear but do keep the properties looking nice and in good repair. best bet would be a maisonnette where you only pay ground rent ie: £100 usually but do your own maintenance. sometimes you need a second mortgage to pay service charges.
This is because with a leasehold, you own the building NOT the land it sits on. Many people made use of this loophole some years ago and bought lots of leasehold land. They are now making a lot of money in rent. There is not enough legislation for rent limits, they can, in theory charge what they like. But they cannot change it whilst you are living there. Most keep the rent low enough to make living in a property on the land viable. If you don't like the idea of ground rent then opt for a freehold property. Good Luck
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