Legal News | 28.01.25

Lease your worries behind: navigating leasehold properties

Everyone aims for a smooth conveyancing process. Part of a smooth process is all about knowing what to expect. Leasehold homes (these include flats and shared ownership homes) can attract hidden costs and affect both buyers and sellers of leasehold homes.

Service Charges

Service charges are payable on most leasehold properties and can be used to cover maintenance costs, building insurance, and to build up reserve funds – amongst other things. It is important to be aware of this added ongoing expense when purchasing a leasehold home.

A BBC investigation published in November 2024 reported that the increase in service charges was on average £600.00 a year more in 2024 than over the previous five years, so annual service charge increases can be high.

Ground Rent

A ‘ground rent’ is a property term given to a rent that is usually paid to the landlord annually by owners of long residential leases. Sometimes, this could be hundreds of pounds, and a landlord does not have to provide a service in return.

Although new leases can no longer contain provisions for ground rents greater than a ‘peppercorn’ (which effectively restricts any ground rent to zero) due to the Leasehold Reform (Ground Rent) Act 2022, long-term existing leases might still include this element.

Other Costs

You may also incur additional costs when you try to sell or buy a leasehold property.

The building of a leasehold home will usually be “managed” by a management company or a landlord and when the time comes to sell the property, the sale often cannot proceed until the management company or landlord has supplied a pack containing numerous pieces of information about the building. These packs can cost hundreds of pounds that unsuspecting sellers have not budgeted for, but they contain regulated information that a buyer needs to have.

On the purchase side, you might encounter additional post-completion costs, including fees for notice of assignments, deed of covenants, and Land Registry Certificates of Compliance.

If you are looking for a conveyancer to handle your leasehold sale or purchase, please contact our Residential Property team at property@wansbroughs.com | 01380 733367.