Do I buy a freehold maisonette?

by Readers Question

10:31 AM, 26th June 2014
About 4 years ago

Do I buy a freehold maisonette?

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Do I buy a freehold maisonette?

I am a first time buyer looking to buy a property which is a first-floor, FREEHOLD maisonette. The property was first listed by the agent as freehold and they have since removed this part of the listing (suggesting to me that it is in-fact an issue).

I have downloaded the Land Registry document which shows the freehold as being all of the front driveway of the property (shaded red) then the area encompassing the property is shaded blue. It is a first floor maisonette (used to be a semi detatched house now divided in to 2 maisonettes) and the owner of the downstairs maisonette owns the back garden.

The Property register states “The freehold land shown edged with red on the plan of the above Tutle filed at the Registry ….. NOTE: As to the part tinted blue on the title plan only the upper maisonette is included in the title.”

I think I am right in saying that this doesn’t class as a flying freehold, and if it was, then I would be unable to get a mortgage based on that anyway. I am, however, interested to know whether freehold flats are as difficult to take a mortgage out on as the same problems as flying freeholds would occur over ownership/responsibility of structural issues.

If anyone with any experience or advise on this matter could shed some light, I would really appreciate it. If it is purely the case that the property would be slightly more difficult to sell on, If I get it for the right price, then surely this would be less of a risk?

Thanks Kat 🙂maisonette



Comments

Neil Patterson

10:34 AM, 26th June 2014
About 4 years ago

Hi Kat,

If you need to borrow against the property I would check the availability and cost of finance first.

This may then make your mind up for you.

10:53 AM, 26th June 2014
About 4 years ago

Hi Kat,

My advice is an emphatic "no"!

Lenders are not keen on masionettes.

Always think with the end in mind.

What happens if your circumstances change and you need to sell this property quickly yourself?

It is of limited appeal imho, therefore it will not enjoy as much capital appreciation as a more popular type of property and you may struggle to sell it.

I am not at all keen on flats (outside of London). Period.

You have so many more options with a house and owning the freehold, plus expensive service charges do not take a big bite out of your cashflow.

A vanilla bog standard terraced house is a low risk, low hassle option imho. Find one in an area of high tenant demand and you can relax knowing that you have a good solid investment that will always appeal to an owner occupier, ensuring your house retains its intrinsic value and will be easy to sell on when you decide to exit being a landlord.

Robert Mellors

10:24 AM, 27th June 2014
About 4 years ago

While I agree with both Neil and Vanessa's comments, to a point, it does all depend on what price you will be paying for the maisonette and the service charge costs, as to whether this would be a good investment or not. If it is at a bargain price then the figures may stack up very favourably against a bog standard house, and to some extent it also depends on your target market as to how easy it will be to let.

In relation to the leasehold/freehold question, it sounds like the owner of the ground floor maisonette may own the freehold of the land that the maisonettes sit on (or it could be someone else entirely), so you would only own the leasehold of the flat, PLUS the freehold of a small patch of land at the front (the driveway). I think that the slightly unusual leasehold/freehold arrangement could put some people off buying the property, but it does not rule it out, and getting a mortgage for such a property should not be too difficult.

I used to own a leasehold flat in Oxfordshire, and I subsequently bought a share of the total freehold for the whole block (in conjunction with about 20 other leaseholders), and I sold the flat about 18 months after acquiring the freehold share, and it was not a problem selling it. (The flat also came with a separate garage, which was in a block of garages across the road, and this further complexity did not cause a problem either).

All that said, as a first time buyer you may be wise to follow Vanessa's advice and go for a bog standard freehold house, and thus avoid all the uncertainty and complexity. (Also remember to factor in the ground rent and service charges when considering buying a flat or maisonette, - it can add up to a lot of money!!!).

Tony Lilleystone

17:37 PM, 27th June 2014
About 4 years ago

As this property is a freehold flat it will be very difficult to get a mortgage on it. Have a look at the replies to point 5.7.1 in the Council of Mortgage Lenders (CML) Lenders Handbook – http://www.cml.org.uk/cml/handbook/englandandwales/question-list/256 – and you will see that apart from RBS (including NatWest) hardly any lenders will even consider such a property.

For that reason they are extremely unpopular with buyers and the advice is generally not to touch freehold flats.

philip allen

11:15 AM, 28th June 2014
About 4 years ago

Reply to the comment left by "Tony Lilleystone" at "27/06/2014 - 17:37":

Just issue yourself a lease.

Puzzler

15:25 PM, 28th June 2014
About 4 years ago

Who owns the flat underneath? Isn't the concept of flying freehold largely superseded by "share of freehold"? If not, maybe you can change the lease to say that making it all much easier.

Kat Taylor

21:14 PM, 28th June 2014
About 4 years ago

Reply to the comment left by "Neil Patterson" at "26/06/2014 - 10:34":

Thanks Neil, yes, this is something I'm trying to look in to although freehold flats seem to be a bit of a grey area with lenders.


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