First time buyers buy with their hearts – much more so than people who are already on the property ladder. They are so keen to find somewhere they like, in the right place at the right price, that they often say, “I’ll take it!” But what are the pitfalls if it happens to be a leasehold property? >>
When first time buyers are trying to get on the property ladder, they often view homes that are leasehold. This means they are buying a long lease with obligations along with their bricks and mortar. As well as obliging them to adhere to certain rules, a lease also means buyers are committed to paying a service charge. That’s not to say first time buyers should shy away from leasehold properties as this would place huge restrictions on the properties available to them, and it would rule out most apartments and even some houses. But they should be aware that when it comes to living in a leasehold property, the needs of the group outweigh those of the individual. If they don’t respect that, they will quickly find themselves out of step with their neighbours, and this could lead to many problems.
Common restrictions in leases include:
>> Improvements – significant home improvements will usually require the landlord’s permission.
>> Pets – just because a pet lived there before, it doesn’t mean all pets are allowed, and consent may be required and also withdrawn.
>> Parking – you may only have a single space for two cars, but not observing parking rules is one of the quickest ways to fall out with your neighbours.
>> Satellite dishes – drilling holes through outside walls can compromise the fire proofing in modern buildings, so many have a communal dish and a restriction on individual satellite dishes. That may mean missing out on feeds from non-UK broadcasters.
Checklist before buying:
>> Your solicitor should make sure enough is held back from the proceeds of sale to cover any extra service charges incurred before you move in and which may be demanded after completion.
>> Make sure you understand the obligations of the lease by asking your solicitor to explain them.
>> Ensure that you ask what the service charge will actually cover.
>> Avoid nasty surprises by checking if there are any major works due on the property that might incur significant top-up payments?
>> Is there enough space for bikes, prams, etc, in the property as there are likely to be rules prohibiting you from storing them in communal areas?
>> Check to see if there is there a residents’ association.
>> Can you afford the service charge and regular payments such as utility bills and council tax?
>> Are you intending to throw large parties often? If so, check your lease restrictions on noise.