5 Questions you must ask when looking at a leasehold property
When you view a property that is leasehold you should make sure you understand all the facts before making an offer.
You may find yourself in the situation where you view two leasehold properties that look exactly the same and you can’t decide which one is the one for you.
Ask these questions to the owners or agent of each property, because when you look into the lease details there could be a clear favourite!
1. What is the length of the lease?
This will identify if the lease is low and not reflected in the asking price. If the property has a low lease you will need to budget for the cost of extending the lease in the future. If the lease is less than 100 years ask if there has been a request to extend the lease and if so, what is the cost? If the lease is nearer to or less than 80 years, then you must ensure you know the exact cost to extend the lease before entering into negotiations to purchase the property.
You should also make sure the current owner serves the correct notice to pass on the right to extend the lease if you go ahead.
2. What is the service charge?
It is essential that you find out this figure as it could have a bearing on the offer you make. If the service charge is high, you should look to understand why it is high, as you may find you are paying for works that have previously been completed to the block or there is a liability you were not aware of that has to be paid for by the leaseholders.
3. Is there a ground rent charge?
This could also affect the offer you make, higher or lower, as some leasehold properties have a peppercorn ground rent which means you may be willing to offer slightly more to secure the property.
4. Are there any planned works to the block?
This is very important to know as the property could appear to be competitively priced but actually have a schedule of works for the next few years running into £000’s, which as the new owner you will be expected to pay for.
5. Is there a parking space allocated with the property?
You might think this is automatic if there is a car park, but this does not mean the property you are viewing has the use of one! Always make sure you know the parking arrangements.
Asking these questions will also help the owner and the estate agent. If you have been provided with these facts everyone can feel more confident that the offer you make removes any concerns of you renegotiating further down the line when your solicitor raises any concerns around these points above.
At Fairfield, we will be more than happy to help with any questions you have, why don’t you have a look at the properties available? Click here.