Do I need a home survey to buy a leasehold property?
Getting a home survey for a leasehold property might not feel urgent, but it’s highly recommended. In some ways, even more so than freehold tenures.
Why? Because although leasehold properties are only ‘leased’ for a set period, you could still come across sudden hidden costs. You could still get that sinking feeling of instant regret.
Since all this can be avoided by getting a home survey, it’s usually an excellent idea. This article will explain what a leasehold property is and why you should consider a home survey before ‘buying’ one.
What is a leasehold property, and are they okay to buy?
‘Buying’ a leasehold property is similar to renting – in fact, leasehold owners are legally considered tenants. As stated in the contract, you’ll own the property for a specific length of time. The landlord (known as the ‘freeholder’) will then repossess the property once the term concludes. However, in reality, this rarely happens. In most – although not all – cases, the lease gets extended again and again indefinitely.
Most flats and high-rise apartments are sold as leaseholds. When someone buys one of these properties, they buy the right to own it for a set number of years. Initially, someone will sign (or will have signed) a leasehold contract with the building’s owner. When people want to move out, they ‘sell’ their lease to the new owner. The agreement transfers to the new occupant without any amendments unless agreed with the freeholder beforehand.
Leasehold properties often get a bad rep. It’s true that they certainly aren’t for everyone, but there are certain perks, too. These come on a contract-by-contract basis and could include:
- Reduced maintenance costs
- Services included (electrical, water, heating, drains, etc.)
- Use of communal areas such as tea rooms or laundries
- You can move and leave with as little as a month’s notice
Of course, in exchange, you won’t have a property asset growing in the background. It’s the same old buy vs rent argument that could go round and round forever.
What do you need to know when buying a leasehold property?
The most important thing to check before buying a leasehold property is the length of time left on the lease. The shorter the period remaining, the more difficult it’ll be to sell. You should, by law, be granted the right to a fair lease renewal price with the freeholder, but this will entail a privately discussed premium. Be more cautious if the lease has 70 or 80 years or fewer left on it.
Although they can be long and dull, you should always carefully read through the contract. Most responsibilities are defined here, so you’ll know who’s responsible for what. For example, if a pipe bursts in the flat above yours and wrecks your ceiling, who pays for the damage? If you end up with noisy neighbours, is the freeholder obligated to evict them?
Finally, you must be aware that you’re buying a leasehold property. Frequently, people spot a deal online that looks almost too good to be true. Many times, the reason it’s listed for such a low price is that the building, flat or land is leasehold.
Your solicitors will check through all the legal documents, so you should know about these things long before you decide to move in. Still, they’re all good things to check yourself, too!
Should I get a home survey when buying a flat (leasehold)?
It might be tempting to avoid getting a home survey when buying a leasehold flat. After all, the landlord will pay for any problems, right? And the building will always be constructed to the highest standards, correct? And no severe developing issues would have been hidden behind furniture or appliances, surely? You see where we’re going with this.
Many freeholders offer a reasonable service and take care of their tenants. Unfortunately, however, not all are law-abiding or ethical. If the contract does identify you as the person responsible for paying for repairs, what will you do if a home survey finds evidence of damp or rot? Is there a suitable management plan in place if there are signs of asbestos or Artex? (there should be.) Is the bathroom ventilated? Are the gas appliances safe?
A home survey answers all these questions and many more. It’s the best way to ensure the property is in good condition so that you won’t be surprised with high hidden costs further down the road. A home surveyor will also inform you whether the building you’re buying is leasehold or freehold, of course.
Checking through the contract is the other vital part of avoiding regret after you move in. It might cost a bit more to instruct some high-end solicitors, but if they do a thorough job, it’ll be money very well spent.
How can GB Home Surveys help?
At GB Home Surveys, we regularly survey all sorts of leasehold properties – usually flats. Our RICS-registered, experienced team of chartered surveyors are always keen to help you with your move, whether you’re looking for a freehold or leasehold property. After the inspection, we’ll get you a detailed report of its condition within a week.
Could a RICS home survey benefit you before moving into a leasehold property? If so, we’d love to hear from you. Drop us an email to contact@gbhomesurveys.co.uk or give us a ring on 03333 600 685. We’re always happy to have a free, no-obligation chat about your needs.
