be really careful you understand all the terms. When we looked into it some of the terms seemed a bit pants. Like having to give away a chunk of profit when you sell but taking all the liability if property values fall etc. It may also skew what mortgages you are able to get. And beware schemes without clear limitations on whether the mortgages/lender can sell your debt to private companies. Some people have ended up stuck in negative equity/ on high SVR without the ability to remortgage due to that.
Buying a house, Help2Buy
- Thread starter Delvis
- Start date
if it's a new build (which I think help-to-buy reuqires IIRC) see if you can wangle a term that entitles you to independent QA inspections by your own surveyor, architect and engineer. Problems are easily nipped in the bud while the contractor is still on site. They can be a right PITA to rectify later on once the leaks ruin finishes etc after you've moved in.
Cheers all, appreciate the feedback 
Our mortgage advisor is doing our H2B application, now I just need to appoint a solicitor but tbh I haven't a clue there.
We've got two quotes so far, one is what our mortgage advisor has worked with before: £2,174.00
Another is just a national one: £1,752.38
Our mortgage advisor is doing our H2B application, now I just need to appoint a solicitor but tbh I haven't a clue there.
We've got two quotes so far, one is what our mortgage advisor has worked with before: £2,174.00
Another is just a national one: £1,752.38
Be very careful that you understand the terms:
If it's leasehold (unsure if they're still building leasehold houses after the scandals broke) then imo you should simply walk away. The developer will tell you something like "You can buy the freehold in a year for 4-5k" but will then turn around and sell it to an investor who will demand 5 times that.
If it's freehold double and triple check that there aren't any dodgy restrictive covenants in the deeds. Things like estate charges and permission fees are very difficult/impossible to contest and potentially are uncapped. A lot of these developers put in clauses such as needing to pay X amount to alter your house or even change mortgage lenders. This is where having a good solicitor will come in handy. Absolutely do not under any circumstances use a solicitor affiliated with the developer.
If it's leasehold (unsure if they're still building leasehold houses after the scandals broke) then imo you should simply walk away. The developer will tell you something like "You can buy the freehold in a year for 4-5k" but will then turn around and sell it to an investor who will demand 5 times that.
If it's freehold double and triple check that there aren't any dodgy restrictive covenants in the deeds. Things like estate charges and permission fees are very difficult/impossible to contest and potentially are uncapped. A lot of these developers put in clauses such as needing to pay X amount to alter your house or even change mortgage lenders. This is where having a good solicitor will come in handy. Absolutely do not under any circumstances use a solicitor affiliated with the developer.
Thanks
Understood, it is Freehold, as you say all new builds now are freehold I believe.
I'll certainly be checking everything, whilst we're unlikely to make structural changes inside or any major changes outside, it's something that shouldn't be limited too much I feel!
leasehold isn't wrong per say. The issue as you rightly point out is the risk of it being flogged for extortionate gains and disproportionate ground rent fees to private companies. The principle of a landowner wanting to keep control of how land can be developed in future is not immoral. The system doesn't need leasehold banning from existence (most of London and major city centres are leased) it needs control and legislation to prevent greedy extortion. It ought to be quite simple. The lease can be retained by the landowner. If they want to sell tough, then sell to the homeowners. End of. No sale for fast buck to 3rd parties. Ground rents capped to demonstrable expenditure and set aside in funds to be used only for the maintenance and upkeep of the estate.
Seems really simple to me. No idea why they haven;t done this already. Oh yeah, a Tory government. Sorry what was I thinking!
Seems really simple to me. No idea why they haven;t done this already. Oh yeah, a Tory government. Sorry what was I thinking!
Thanks
Understood, it is Freehold, as you say all new builds now are freehold I believe.
I'll certainly be checking everything, whilst we're unlikely to make structural changes inside or any major changes outside, it's something that shouldn't be limited too much I feel!
Google 'fleecehold' for the sort of things to look out for.
It's just a relic of the feudal system really. It's certainly immoral to sell houses as leasehold because there's simply no need. For flats it can be argued appropriate but even then almost the entirety of the world has moved to commonhold or similar. The biggest problems with it as you say are that it's unregulated and that the balance of power lies almost completely with the freeholder despite the fact they generally have only a very small financial interest in the property relative to the leaseholder(s). Basically a money making scheme for those lacking a moral compass. Ground rents for example are just a revenue stream - I've never heard of a freeholder investing the ground rent they collect back into the building, that would be what the service charges are for.
Anyway, let's not derail this thread with leasehold issues as I could go all day (I got burned by it and am somewhat bitter)!
Indeed, I had this with just a regular house purchase, the estate agent wouldn't let me offer on the property unless I met their mortgage advisor. I did, he couldn't beat the deal I already had (which I had details of with me when I went to that meeting) and we shook hands and agreed he couldn't do anything for me. I likely wouldn't have used him even if he had been marginally cheaper anyway, just through lack of trust/impartiality, it would have needed to be the world's best mortgage deal for me to consider it seriously.
@RobHu I sympathise, but I've seen good leaseholds so they are not all bad. I have seen plenty of bad ones too though so I'm not saying they're perfect. I do know however of cases where land has been sold for development of houses of a certain size only, and with guarantees of garden sizes etc. The leasehold ensures the site cannot be redeveloped for taller, or denser housing in future. It matters to the landowner, who still lives on the site. They want people to have housing, they do not want to end up in a cluttered sink estate. Ergo, leasehold. And that is ok. The groundrent does pay for the private roads, the private sewers, the communal landscaping, and assorted bits of maintenance to roofs and so forth that are the freeholders responsibility.
You don't take all the liability if the property falls, I'm paying back half of my help to buy loan as we speak due to property prices falling.
Should my property price not rise enough to offset the value loss of the current valuation I just had, then I'll end up paying less than I borrowed.
Ground rent does not cover the up keep of communal areas, it's literally just paying the landlord rent for your property to be on that land. The service charge is an additional payment to ground rent that covers upkeep of grounds etc.
I'm certain there are some good leaseholds that work well, even houses. The fact remains though that a) lack of regulation leaves them open to huge abuse and b) every other country in the developed world manages just fine without them. I am not aware of ground rent ever being spent on building upkeep - Service charges and 'estate charges' that have been introduced now new leasehold houses aren't being built cover that.
The one we looked at did. Glad we didn't get involved with it if it's not the norm. How gutting would that be? We'd be like the poor people I was reading about in the news stuck on high SVR in a property they can't remortgage.
Fair point. So the issue really is spiralling ground rent as opposed to leasehold itself. I don't think it's wrong for someone to want to retain ownership of land. You can live on my land for 100 years then I want it back when we're over the hump and population declines again. Sounds reasonable to me. As is the system of permissions. With the gov trying to allow 2 storey additions under PDR I would not sell any land without some means of preventing people creating stupid buildings that block out light to everyone else around them.
You're right, there are some very bad ground rent terms such as doubling every X years.
I'm not sure why the property you looked at had different help to buy T&Cs, I was under the impression all loans had the same T&C's but I'm not entirely sure on that one.
I'm not sure why the property you looked at had different help to buy T&Cs, I was under the impression all loans had the same T&C's but I'm not entirely sure on that one.
there have been a few different help to buy schemes over the years. It's possible terms have changed with different tweaks. There was also a weird hybrid whose name escapes me now, where it was assisted buying or something which somehow was different. There were three different schemes we looked at. All sucked, and we waited a few more years to save a bit more ourselves, got an horrific mortgage at first, but worth it now as we own our own place, freehold and finally at a healthy LTV for remortgaging. Also we weren't forced to buy some crappy new build flimsy junk. Admittedly the thing is needing an awful lot of TLC and is becoming something of a moneypit, but at least we're not peeing it away to a developer who should have built it right in the first place!
Other countries have equivalent systems yes, usually commonhold in the case of apartments and freehold otherwise. It's not without problems but it resolves the main issue which is that a 3rd party other than your mortgage lender has a financial interest in your home and is able to impose often unreasonable conditions upon you. In Germany specifically I don't know much about buying property but I do know that most people rent because they have very strong protections in law for tenants which means that buying a property is seen as more of a once in a lifetime event. The culture of trading up houses doesn't really exist and almost everyone is a first time buyer (apparently).
Few things I was really careful on with ours was
Not lease hold
No fleecehold charges like u controlled service charges
No deal breaking covenants
I previously thought freehold was freehold. No restrictions.
One in particular was I wanted chickens and there are covenants for that.
One particular weird one with mine is.. No for sale signs displayed outside the property
And there wasn't any when we viewed
Not lease hold
No fleecehold charges like u controlled service charges
No deal breaking covenants
I previously thought freehold was freehold. No restrictions.
One in particular was I wanted chickens and there are covenants for that.
One particular weird one with mine is.. No for sale signs displayed outside the property
And there wasn't any when we viewed
Hilarious.
The wife wouldn't mine chickens truth be told Probably not the house for them mind