What should I consider before buying a leasehold property?

Issues surrounding the ownership of leasehold properties are varied and complex.

There are many issues that will have bearing on the value and marketability of a leasehold property and it is important to do your research before buying a leasehold property to ensure you understand the extent of your commitment.

These are some of the questions ALEP recommends asking when researching potential leasehold properties:

  • What is the lease length?
  • What is the ground rent and how will it escalate in the future?
  • What is the shortest lease your mortgage lender will allow? This can be 75-80 years, so if the current lease length of the property you are considering is close to this limit, you can probably use this as a point of negotiation with the vendor.
  • What is the freeholder like?
  • Who is responsible for the maintenance?
  • If a managing agent looks after the property, what are their fees?
  • What is the annual service charge and what does it include?
  • Are there restrictions within the lease (relating to subletting, alterations or keeping of pets for example) and how do they sit with your intentions as to use of the property?
  • Is there a head lease/intermediate interest or any other parties associated with the ownership of the property?

Most importantly, ALEP always recommends speaking to an expert in residential leasehold property as they will have the expertise and experience to deal with any number of issues. Many ALEP members will be happy to explain the options available during an initial telephone conversation.

Freeholder’s details:
ALEP’s member firms are highly experienced in dealing with the various, complex issues associated with leasehold and enfranchisement, such as:

  • Extending leases
  • Collective enfranchisement
  • The implications of informal lease extensions
  • Marriage value
  • Leaseholder vs. freeholder disputes and resolutions
  • First-tier Tribunals
  • Over-inflated ground rent, service charges and insurance

About ALEP
Formed in 2007 and now with 215 member-organisations, ALEP is a not-for-profit association that brings together barristers, managing agents, project managers, solicitors and valuers working in the residential leasehold sector.

ALEP promotes best practice by vetting individual barristers and organisations to ensure they have significant expertise in leasehold enfranchisement. Membership of ALEP acts as a badge of assurance so that flat owners and freeholders can be confident that they are employing professionals with the right level of expertise in handling potentially complex transactions.

For further information about ALEP or to find an ALEP professional, please visit www.alep.org.uk, call 0845 225 2277 or follow ALEP on Twitter @ALEPofficial.