With a leasehold flat you own the right to live in it for a fixed number of years, set out in the lease. The building and land are owned by the freeholder, who usually appoints a managing agent to run it.
Before you buy, check how many years are left on the lease, the ground rent and how it can rise, the last three years of service charge accounts, any planned major works, and the building’s safety position.
Lease length
Check how many years are left. Lenders want a comfortable number remaining at the end of the mortgage term, and once a lease falls below 80 years, extending it becomes markedly more expensive. If an extension is needed, a purchase can take between 3 and 6 months.
Ground rent and service charge
Ground rent is paid to the freeholder. For most new residential leases granted since 30 June 2022 it is a peppercorn, meaning nothing. Older leases may have ground rent that rises at intervals, which some lenders will not accept.
Service charge pays for maintaining the building. Ask for the last three years of accounts and whether any major works are planned. A large bill shortly after you buy is one of the most common complaints we hear.
The management pack
The seller orders a management pack from the managing agent. It sets out charges, arrears, planned works and building insurance. Agents can take several weeks to supply it, and it is often the longest wait in a leasehold sale.
Leasehold fees you should expect
These are set by the lease or the managing agent, not by us, and are passed on at cost:
- Notice of transfer fee: often between £50 and £350
- Notice of charge fee, if you have a mortgage: often between £50 and £350
- Deed of covenant fee: often between £75 and £250
- Certificate of compliance fee: often between £75 and £250
These fees vary from property to property and can on occasion be significantly more. We confirm the figures once we have seen the lease.
Building safety
For taller blocks, lenders may ask for evidence about the external walls, and the Building Safety Act 2022 limits what some leaseholders can be charged for historic safety defects. We check what applies to your building and report to you before exchange.
Thinking of buying a flat? Get an instant conveyancing quote or call us on 0161 660 1505.
This article is general information about the law in England and Wales at the date above. It is not legal advice on your situation. Please contact us before acting on it.
