Why I Would Never Buy Leasehold Again | Selling A Flat With Ground Rent Over £250 

If you think leasehold is a scam, have a look at shared ownership (for a leasehold!). Not only will you have a mortgage to pay for owning PART of a lease, and then paying rent to the other owners on their share of the property. Given that properties under shared ownership can be a studio or one bed flat, so the 'share' of ownership is a number that won't reflect any sort of living condition in the property (e.g. owning 50% of a 2 bed, 2 bath flat gives one bedroom and 1 bathroom, nope). On top of this, as a shared owner you cannot rent the property out either. All the while, you have ground rent and service charges to pay, since you don't actually own any of the property as all you have is part ownership of a lease. So, if you want to pay a mortgage and rent to live in a flat that you don't own and cant rent out, go for it. Otherwise, avoid!

Thank God I came across your video! You have saved me from a potential nightmare! Thank you!

This happened to me with my first flat. Charges initially manageable and no big deal soon eclipsed my mortgage. I sold it for half of what I paid, to a cash buyer. Any longer and I wouldn't have been able to give it away, nobody wants to take on that financial liability.

Definitely not worth buying Leaseholds ...the service charges are pure theft !!

Your video is brilliant and should be essential viewing for anyone looking at buying leaseholds. Estate agents should also be advising about the ground rent value and significance of this at the time of viewing.

Great video, should absolutely have more views! Another thing to note is that you can often purchase a copy of the lease agreement for the property you are interested from the Land Registry for a nominal fee of £20. That way you can get a breakdown of the fees and fee increases, terms and conditions, forfiture clauses etc before paying out for a solictor/ survey. Alternatively, I'd be interested to know what you think of share of freehold flats? They seem to avoid a lot of these issues, but may bring about their own headaches in trying to coordinate maintainence with the other shared owners.

Wise words indeed from one so young. Thank you for sharing your experience and for the good advice. You've highlighted all the potential pit falls to look out for, in a clear and concise manner. I'm presently looking to buy a flat, having previously only ever owned houses, so I'm unfamiliar with the implications of Leasehold, Ground Rent, Service Charges etc. This will certainly be very beneficial in helping me weigh up all the pros & cons before committing. Thank you once again; subscribed 👍

Thank you! This is so helpful and timely for me

thank you so much for sharing your story.

An excellent explanation of leasehold. Thank you for sharing. This is really useful info.

Don't buy a leasehold please,we made that mistake but we eventually got rid of it.

Thank you so much for explaining so well 🥰

Totally agree. I recently sold my flat in a small block we managed between us, nightmare because new owners refused to pay service charge on time, removed fire doors, didn’t contribute to works needed and wanted to run an air bnb which was against the lease. Never ending headaches and inadequate sinking fund for legal action…Now happily living in my new freehold house. Never again

Extremely informative and helpful, thank you.

This is really helpful. Thank you. I need to save more and get a freehold!

These landlords are sharks. Had to sell my deceased mother's flat. Landlord wanted £30k to extend the lease - couldn't sell without that. They were charging £540 a year buildings insurance. Then they said we had to get a deed of variation as the internal layout had been changed - it hadn't and physically couldn't have been where they said it had. We were at a stalemate as there was no onus on the landlord to prove this. Another £3k gone. In the 40 years the flat had been owned by my family the landlord did nothing to improve the building. Just as we were about to sell to the buyer the landlord said unless we set up a right to manage company they'd have to come in and take over management - Southern they were called. I Googled them and read bad reports about them doing this so we had to set up a right to manage company. Another £6k - solicitor was a shark too. I said never again will I get involved in a leasehold flat. Just to show what a ripoff the landlord's buildings insurance was, after we set up the right to manage the building insurance dropped £400 a year per flat. For the £540 we'd been paying, or my mother, all those years not once could we claim on anything - e.g. the render was falling off. Landlord said nothing to do with them - wasn't covered under the buildings insurance! Avoid Southern landlords - complete sharks.

Thank you So much for this. I have to going crazy trying to decide if I should buy a flat I looked at a while ago. This video has put me right off. I think you saved me an enormous amount of hell. Thank you

This is massively eye-opening and useful considering I am looking to buy my first property. Depressing that many people can only afford a leasehold property.

Brilliant video. I also had an absolute nightmare with my solicitors when selling my flat but for different reasons. It took 7 months and it was unbelievably stressful. I nearly lost the house I was buying too as the seller was so angry with how long it was taking. He said in the end that he will give 2 days and if it doesn’t complete he would pull out of the sale. Thankfully it went through at the last minute by some kind of miracle and me literally begging my solicitors to hurry up. I didn’t even have a moving date until 2 days before so had to pack up everything and sort removals in that time. It was all a complete mess and the solicitors were atrocious. I would never buy a flat again even though I had mostly a good experience whilst living in it. It was reverse freehold though so not the same as yours. My dad just put an offer on a flat with short lease and high management fees etc and I’ve begged him not to do it. Thankfully he’s changed his mind. He’s downsizing so he thought a flat would be a good idea. I’ve talked him out of it. Your shared experience is so informative and will help many people. Thank you

Thanks for sharing.

Thank God I have bought a freehold house outside of London, then leasehold flat in London.

Good work. Just found this channel. Looks like everyone apart from those at the top and those who are playing with cash are screwed.

Very interesting video thanks. I could relate to most things you mentioned, when I sold my flat. One problem I had was the lease didn't mention I owned the upstairs of my split level flat! Also,, until I put it on the market, I had no idea it had a short lease or that my name was misspelled on the title document. In the end I sold at 40% of market value, and the whole thing was up in the air until completion day, because the deal rested on getting the BSA certificate. I breathed a sigh of relief when I had the money in the bank, but more so because at last I didn't have my name on the deeds.

To anybody thinking of buying leasehold read The Jungle by Upton Sinclair. The last chapter in the book is way of message, but the rest is spot on.

But you are saying You didn’t read the contracts so I think that’s probably the most important advice given. But yea I don’t know why anyone would want a leasehold anyway, it’s modern day feudalism. Great video.

Now I know why many flats are for sale for a lot less than was paid a few years ago.......not for me

I bought a flat leasehold , I’ve ended up director of the management company :-/ , we have a problem person in the first flat and she has made it and is still making it a nightmare. She was stealing money from the house funds (£1300, it was more ) and everything is an absolute pain because of her , we only pay £40 to £50 per year ground rent and the service charge is only £68 and she still refuses to pay the same as everyone else :-/ , we had to take her to court for the £1300 , it only cost £1700 🥳🤯😳😵‍💫 , have a heart for those like me who have ended up managing a house and don’t want to :-/ never again 😳

since leasehold i've developed a rule of thumb, let then take you to court. the process of going to court takes forever, and the leases are clearly not fair (hence the reform bill) so you stand a good chance the court will be on your side - just cos they have "a legally binding document" doesn't mean the court won't rule in your favour. and my management company has not seen a penny from me while we wait for a court date....

The worse problem i had was terrible dogy management company

Your experience was identical to mine ! Went through so much stress. Luckily I had a great estate agent. Finally have a nice house 🏡. But I do look back regularly on these situations

great video, u should share that to the bbc and the housing association to help the leasehold reform 2023 to become reality. I pay £350 for my ground rent and the service charge has been increased to £5200 per year , I'm disgusted of the landlord but can't do anything

i'm buying leasehold now in london. Sounds horrendous but house prices are crazy. Its all slavery we are slaves. Would be good to see your blog

My leasehold is a 1000 years and it started in the mid 1970s with a ground rent of 5 pounds a year. I ve not encountered any problems with it having unexpected costs as it is a house but I would like to buy it out.

Read your lease or get a good solicitor or both. Personally I have ensured my freeholder can not increase the ground rent/service without 6months notice. I also negotiated that if the freehold is sold that the new freeholder will be bound by the above terms. This gives me plenty of time to sell if the shit hits the fan and an aggressive management firm becomes the landlord. PS.... My property is a house not a flat in a building - where there are clearly more liabilities especially if the block is old. A new build that is @5years old would have had any initial issues fixed and be low cost for ant landlord to operate. So low service and ground rent costs and insurance.

Feel your pain and personally would avoid leasehold at the moment because service charges will increase significantly with inflation and there are numerous legal issues surrounding ground rent making it overly complex to buy and sell. Agree with your recommendation to read the lease carefully before buying but your solicitor should advise, listen to them. It's also important to confirm there is a sinking fund that's adequate for ongoing maintenance of large ticket items like the roof. Also look at the rate of increase for the service charge over a number of years (where possible) and factor that into your future budget, they can go up alot and quickly. Finally make sure the length of lease is sufficient that when you come to sell it won't need extending as that's also expensive.

Thank you so much for this. I suspect that we will have to wait for a strong government to sort this out; one which isn’t bought off by the freeholders.

Is there any quantitative data about what percentage of freeholders have service charges above say, £5,000 in any given year, £7,000, £8,000 etc? And if they go up that much, how long they stay at that level before coming down again? I agree these stories seem bad but it would be good to put things in perspective.

Thank you for this video, really clear and covers a topic completely draped in complexity and industry jargon I’m currently in the situation identical to your buyer, I’ve never heard of any of this before but the flat we hope to buy has ground rent linked to RPI Our solicitor has asked for the seller to get a deed of variation, but what does that actually mean? Is that capped then forever, or just for a certain period of time? This has thrown a spanner in the works as, like you say, I don’t want to be trapped in an exploitative situation and further down the line struggle to sell

I agree, I think leasehold is a waste of time.

Lease hold Properties are Fine as long as there is no Ground rent or service charge , its if the ground rent goes above £250 and you default on paying the Ground rent , then the lease holder can Re posses the property this is very very Rare though . But this is hopefully going to be overturned in Government this year with a new Bill. I own a lease hold property with 992 years left on the lease . There is no Ground rent and no service Charges . so Its no problem at all .All Flats are lease hold , so don't be put off of buying a lease hold property , Just don't Buy one with a Ground rent , and if possible a maintenance Charge . Although Maintenance charges are common in Blocks .

People who complain about the UK, go check Germany. Buying costs as first time buyer are between 10% and 12% of the property price. Yes 12% !!! Imagine you buy a property and you are already making a 10% loss on it

Why does anyone buy a leasehold property? I'm working class, from the north and in an unskilled job yet I was taught growing up in the 80s never to touch leasehold property in any way and that it's nothing but a scam. After leaving university I actually had the sense not to follow the rest of the brain drain migrating away from our villages and towns to our cities. This means that though I'm only earning 30k a year in a none professional job, which is a high wage for the town I live in, I managed to buy my own freehold three bedroom semi detached house on a single person mortgage at a mortgage repayment amount of £250pcm.

i get the feeling these management companies employ their own subsidiaries to do the work at inflated prices so the service charges go up.

If I buy leasehold property and is saying that ground rent is 0 and service charge 0 as well, can it change? As I find some properties which 0 charges.

Your gona make the flat owners stuck with flat

I am about to buy a leasehold flat. Is a bit confusing about what you can and cannot do in your flat without permission.

Did your conveyancer not review the lease and advise on these issues ?😮

I need advice. I wanted to sell my shared ownership property. 50%. I filled the forms. But had not received management pack yet. The pictures were taken. No solicitors had been engaged yet. I decided to not sell.. But lo and behold I am now requested to pay 1140. I had not even engaged any lawyer. Any advice?

Did you feel guilty for the buyer of your flat? Knowing all the issues you encountered were going to be inherited by the buyer?

Great videos. All the while, while you're chatting, I am thinking 'who the fuck actually took on the shit show that was your flat'? I nearly bought a leasehold up north but fortunately I saw sense, bought an old Victorian place and now walk around with a smug look on my face most of the time. Smug-smug.

Council flat is ok

I'm not going to lie. That was hell

The UK government will never outlaw leasehold and have stated that they have no plans to review or do so. Why?... because of the 'huge' annual revenue that it generates for 'them' in taxes. There are national and international companies out there that their business model is solely built on, buying up freeholds from developers including the exclusive estate management rights from the developer, who has no problem selling it to them, has that finance goes towards their next planned development - and the cycle continues. I lived in spain for a number of years and know that Spain does not have such a thing has 'leasehold' properties. When you purchase a house or in that matter an apartment, you own it outright (the walls, floors ceiling and everything constructed within it). This has been an ongoing issue in the UK and many people are outraged buy it. Recently the UK government have now even gone as far has letting developers sell 'houses' with a lease!. Leasehold is a 'government scam' because they are the ones who have the ability yo outlaw it...but due to their own greed, choose not to. Finally, adding to your issues of selling your previous home, with ground rent D.0.Vs and new development paperwork etc. I recently reserved a new development apartment. I was offered to use the 'developers solicitors' ...which I declined, and informed them that I will be using my own. On the outset my conveyancing solicitor found this £250 annually reviewed and measured against RPI immediately. We refused to proceed unless this was removed and set to zero (peppercorn). Which after a months of struggle the developer agreed to do, but we later found out that they had not got the mortgagees of their development consent or signature for the new D.O.V!. Also, new developments come with a charge against them (the money lent to the developer by the lending bank to build the apartments etc) My solicitor instructed them that the charges had to be removed by the lenders (bank) solicitor prior to exchange of contracts. This they said could not be done prior, but would be done post exchange and completion (within months!???). Also, with my solicitor being very 'anal' regarding correct documentation to protect me the buyer and not budging until he got it, the developer had said that their other buyers in the development had not raised the same issue or been so detailed has my solicitor had been. (etc, requested legal documents missing or not even provided etc) And the sole reason for this was because 90% of 'those other buyers had chosen to use the developers solicitors (presumably due to being told it would be 'quicker' for them or because of a financial package.....which is a big red flag and a 'no-no'. Because when those present owners come to sell, there will be missing legal documents/ incorrect worded contracts etc which the new buyers solicitor will request, but unfortunately would never had been supplied by the 'developers solicitor' when the property was 'originally' purchased. Which most lenders will not lend on.

I dodged a bullet thank God

I would like to know if I can be charged ground rent, if I pay monthly rent and service charge on a housing association flat. I keep getting letters asking me to pay over £3000 in ground rent. I do not own the property. I just ignore it and assume this must be a scam.

NEVER BUY a LEASEHOLD Property.. I luckily got rid of my flat back in 2015 because of ridiculous Service Charges. I pulled out of 4 other Leasehold properties because of problems. In the end I paid another 40K & bought a 2 bed house instead. Best decision I ever made. You literally are better off renting than buying a leasehold property.

Is a Share of Freehold better than a typical leasehold property?

I sold my flat in 2020 after trying for 4 years. The best decision of my life was to get rid of it.. It's a scam , no doubt

ENDIMINITY POLICY'S ARE MONEY IN BACK POCKET OF SOLICITORS NO INSURER WOULD INSURE THE NONSENSE THE SOLICITOR TELLS YOU

yyyyyyikes its way too complicated

I am really sorry to say, but I don't agree with quite a bit on your video, you fail to see the other side. Your experience was n't great, but your view of the world is being tainted by this. There are pro and cons to living in a leasehold flat. The service charge can be a downside. Ground Rent - you resent paying this, but there are Ground rent from old leasehold flat from the 1970s, where the ground rent today is £25 per year. It is n't worth collecting and Freeholders disappear. This causes a huge number of issues. It is n't worth the hassle collecting. This is why I think they need have the Ground Rent at say £100 per year and rising with inflation. (The cap of £250 a year might be fine for 2023, but in 2053 with high inflation it may ground rent might be worth nothing). Freeholder - is not allowed to make a profit. If the lift breaks down and the managing agents send someone to fix it for £1,000. Then they charge the residents £1,000. They can't add profit and charge £1,100, for their time and effort. The only time, Freeholders can make some money is leasehold enquiries or extending the leases. Sometimes it is would be £200 for enquiries, but £800 is extreme as it was in your case. In some cases the Freeholder has to consult a solicitor for advice on certain matters (they have to read the lease and then advise accordingly plus the drama of KYC). However, LPE1 form has got fatter over the years. They ask a lot of questions. Freeholder is under not obligation to answer those questions. It is a burden on Freeholder's time. Freeholders can be held liable for any errors. Freeholders to get a rough time, with leaseholders not paying service charge. There is a constant tug of war. Sometimes people don't pay for just reason (as in your electricity example), however, at others time, they expect a free lunch. Sometimes you get crooked Freeholders, who overcharge or get someone they know to carry out repairs. Also, Freeholder can only go to big companies for repairs (who give invoice and respond to quotations). Small builders who are cheaper, just don't want to hassle of providing quotes for tenders or jobs they may not get. You mentioned Airbnb - in your building. However, there may be leasehold restrictions about this. You would expect your Freeholder to do something, but then people resent paying ground rent (which is peanuts). Many managing agents charge around £250 per year per flat. The Ground rent going over £250 is an over reaction. The government should have just have lifted the cap. There is nothing wrong with ground rent going up with RPI (which is fair), but doubling ground rents are problematic "in some cases". Some ground rent double every 33 years. So there is nothing wrong, as inflation would erode it. However, ground rent doubling every 10 years, could be nasty. Electricity - blocks of flats get charged commercial rates for electricity not residential rates!. Solution: In my opinion, we need leasehold reforms which are fair to freeholders and leaseholders. In my opinions, we need a not-for-profit managing agents and not-for-profit builders who help service blocks of flats. This will help reduce costs for leaseholders. It reduces risks for landlords. In large blocks of flats, we could concierge to bring down security cots. A lot of blocks of flats seem unloved. They have this system in France....

Abolish leasehold!

Moneyed ones like her moans about ground rent you look as if she is short doesnt look like it its only once a year what do you expect naive but understandable a flat to me is only for Rent and even now hard going.