Freehold Maisonette
Discussion
Hello All,
I am after some advice; with regards to a property that I am interested in.
The property in question is a 2 bed terraced house that has been split into two maisonette's (both have separate entrance) upstairs and downstairs.
The property for sale is the downstairs maisonette; which is 1 bedroom freehold and owns (if that is the correct phrase) the freehold for the entire property.
The upstairs maisonette is leasehold; on a lease in excess of 100 years with no service charge and a ground rent of £125pa - this is what the agents have told me.
Having googled this it seems like getting a mortgage on this type of property shouldnt be a problem according to the CML handbook but I wanted to know the opinions of the PH collective on this?
I am aware that freehold flats are not mortgageable and are pretty rare - but from what I have gathered this property is not a freehold flat perse.
The agents have told me that the downstairs property is responsible for aranging buildings insurance which is split 50/50 with the upstairs flat.
Are there any other factors which I need to take into consideration when considering a purchase of this type? Is it better than purchasing a bog standard leasehold flat which you pay service charge/ground rent?
Any advice or help is greatly appreciated for a FTB.
I am after some advice; with regards to a property that I am interested in.
The property in question is a 2 bed terraced house that has been split into two maisonette's (both have separate entrance) upstairs and downstairs.
The property for sale is the downstairs maisonette; which is 1 bedroom freehold and owns (if that is the correct phrase) the freehold for the entire property.
The upstairs maisonette is leasehold; on a lease in excess of 100 years with no service charge and a ground rent of £125pa - this is what the agents have told me.
Having googled this it seems like getting a mortgage on this type of property shouldnt be a problem according to the CML handbook but I wanted to know the opinions of the PH collective on this?
I am aware that freehold flats are not mortgageable and are pretty rare - but from what I have gathered this property is not a freehold flat perse.
The agents have told me that the downstairs property is responsible for aranging buildings insurance which is split 50/50 with the upstairs flat.
Are there any other factors which I need to take into consideration when considering a purchase of this type? Is it better than purchasing a bog standard leasehold flat which you pay service charge/ground rent?
Any advice or help is greatly appreciated for a FTB.
What you have there is really pretty common...I own two flats on a similar basis. Having said that they are structured slightly differently. Normally you own the flat through a normal lease and also own a % of the freehold via a share in a freehold company that owns the building. So in one of my flats....I own the flat on a 999 year lease and also own a one third share int he freehold company that owns the building. These freehold companies have to file accounts (although oin both cases the companies are dormant) and we just pay bills on an ad hoc basis as they come due.
Not really sure how you should structure yours but you would definitely need to declare the ground rent on your tax return. I'd also want to have a look at the other flat's lease....they probably are supposed to pay a service charge but that's been dropped and kept informal. You definitely need to know though as for example if the roof needs major repairs you need to get their 50% off them.
It's very simple but you need to know where you stand....really the lawyer doing your conveyancing should be able to advice on the lease and an hour with a friendly accountant to explain what you need to do with regards to HMRC.
Not really sure how you should structure yours but you would definitely need to declare the ground rent on your tax return. I'd also want to have a look at the other flat's lease....they probably are supposed to pay a service charge but that's been dropped and kept informal. You definitely need to know though as for example if the roof needs major repairs you need to get their 50% off them.
It's very simple but you need to know where you stand....really the lawyer doing your conveyancing should be able to advice on the lease and an hour with a friendly accountant to explain what you need to do with regards to HMRC.
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