New Build leasehold experiences

[Baked_bean]

Hi all,

My girlfriend and I are currently in the process of buying a house from Persimmon, the property is a leasehold with a 999yr lease. We have been aware of this from the start of the process and planned on paying it at the earliest opportunity (2 years), we have however recently read a few horror stories involving freeholds being sold to third parties. The stories tell of extortionate fees to purchase and no notice from the developers, this is what I want to avoid.

Does anyone have any experience of the costs involved or have any experience in the field? I just want to avoid having an unsellable house with an unaffordable lease.

Thanks in advance.

[Baked_bean]

No option to buy at this point sadly. I am prepared to pay down the line but don't want some third party charging an unrealistic price.

[Baked_bean]

olivebrown said:

Your ground rent is stated in your lease and any increases.

I.e £300 per annum doubling every 20 years or 10 year RPI being more common now. So your ground rent is known and can't just increase it.

Currently they are selling at avg. 35yp, but depends entierely on the rent review provision and location.

Freeholds are mostly bought by institutional funds. They will appoint a company to manage the collection of ground rents. They do charge additional fees for consents, such as when selling or remortgaging, which they have the right to charge for. The lease may state the minimum they can charge normally.

Service charge is entirely seperate issue. Again management company (which you as leaseholder may hold shares in) appoint a managing agent. If you feel they are charging too much, then you can ask for budgets and challange it.

Generally rents/fees in majority cases are stated up front. The onus is on you to read your leases/contracts. I wouldn't bother just reading "horror stories" and taking it as gospel.

Edited by olivebrown on Friday 3rd February 22:32

Edited by olivebrown on Friday 3rd February 22:36

Thanks for the answers everybody.

My partner and I are just hoping to get an indication of cost of buying the freehold at the 2 year mark (which I believe is when we are allowed to buy it from?). The ground rent charges are minimal ~£140per year but we are thinking long term in terms of selling the property.

[Baked_bean]

I thought I would chip in as the OP. My Mrs and I have decided to pull out of our house purchase due to the leasehold issues. The house was perfect in size and location, but not worth the hassle and potential losses long term.

We will loose a few hundred in reservation fees but it is the right thing to do.

Thanks for your input.

[Baked_bean]

Thanks for all the worldly advice. Now getting on with the house hunt again, found a lovely bungalow in need of modernisation but I think it could really be turned around.

[Baked_bean]

Further update if you are interested: we have now had an offer accepted on a fixer-upper bungalow.

Might start a thread on our renovation once/if we move in,

Thanks for the advice from everyone.