By Mabel Wellman.
It was July 2024, after a breakup with the partner I had lived with for several months, when I started looking for a place to call my own. At that point I had only lived with said partner and my mother before then, so this was the first time I had ever viewed properties and I was very nervous. I’ve lived in Southampton all my life and always found both the old and new flats and houses in the city interesting, but in viewing them myself, seeing the good, and the bad homes in the city, it does feel like my perspective has shifted about what makes up our city.
As a, then, 22 year old trans woman purchasing a property alone (rather than with a partner), I am very lucky to afford any home, but it did leave me with a very modest budget when looking for a place to live. This has hugely affected my experience compared to a working couple who would be more likely to purchase a freehold house rather than a leasehold flat.
For readers who are unaware (because I certainly wasn’t before I started viewing places), the difference between a freehold and leasehold property is that a freehold deed includes the ground the property stands on. For a freehold house this means you own the house and the ground itself complete in your name, to make any alteration and repair to your heart’s content (planning permission and such withstanding). With a leasehold property, it’s a bit more complicated.
Firstly, you do not own the ground your property is on. So your leasehold property, mostly flats but also some houses, sits on the ground owned by somebody else. This means you only own your home by holding a lease, so your ownership of the property is for a finite amount of time, and you must pay rent for the ground your property stands on (the ground rent) to the company/individual who owns the land your property stands on (the freeholder, who owns the external and communal areas of a block of flats). This ground rent is typically a small annual payment, around £200 per annum on average, with some homes only having a minuscule payment (a “peppercorn” rent) as low as £1 which exists purely for legal reasons so the leaseholder cannot be evicted and makes the lease of your leasehold home legally binding. The term of your lease can be extended. At the time of writing, if your lease falls under 80 years until it expires (at which points ownership of the property returns to the freeholder) the payment you must make to extend your lease with the freeholder will include a percentage of the value of your home (the “marriage value”) and so can cost tens of thousands of pounds – these financial obligations mean it is extremely hard to get a mortgage on a property you would like to buy if the lease is due to expire in less than 80 years.
A second precipice to navigate with leasehold properties is service charges. These charges include the maintenance of your property, this can include estate fees (to pay for paving, roadworks and even coastal defence for seaside properties); the cleaning, repairs and improvements for the building, and also fees for management costs and insurance. Some of these charges are very fair and reasonable, but these costs can vary from property to property and can increase very quickly and make homes suddenly unaffordable. If you do not pay your service charge your mortgage lender could be notified to have your home repossessed. There are some Southampton buildings in the city centre which have made national news due to leaseholders feeling “trapped” in their homes due to service charges quickly rising due to issues with external cladding. These owners are living a nightmare where they cannot afford to live in their home due to the high service charges, but said charges and cladding issues threaten their homes being able to be sold to someone who would need a mortgage.
Over my time viewing properties there were also changes to landlord rules in the UK, including rising stamp duty and changes to eviction law in the favour of tenants. Whilst this happened it did feel that a lot of flats in my budget were suddenly pushed onto the market due to these changes. This was of course for me and most others a nice problem to have as it was more of a buyer’s market. It did however, leave me with some horror stories of viewing some flats which were in absolute states of disrepair, one even had both the main and en-suite bathroom absolutely top to bottom covered in mould. Buying a property with tenants living there (as so many times had been the case) is again a potential red flag, it will mean buying and having to pay for a property for months until you can get to live there, and that’s being optimistic that your unwanted tenants don’t refuse to leave.
These four considerations (leasehold ground rents and lease terms, service charges, and whether there were a tenant in situ) filtered a lot of properties which were in ideal or desirable areas in the city, including some famous buildings looking over our beautiful parks never getting viewed by myself because the service charge on them were upwards of £3000 (and who knows how that would rise in 5-10 years even if you could afford £250 a month now). During the peak of my flat viewing I was looking at 2 or more properties a week whilst researching several more to consider at any one point. It was stressful but I was very lucky to live with my ex partner somewhat amicably until I could move. As someone who really likes the buildings in Southampton and our outdoor spaces, it has helped in a way change my perspective on how these buildings can look on the inside and how they are managed internally.
Last month I finally got the keys to my first home and have just started settling in. I feel it has really paid off taking my time researching and keeping my options open until I found my new home.
Whilst leasehold reforms are currently underway in this country, I do have my doubts that these changes can help the many households already struggling. Many improvements to make this way of home ownership fairer are only going into law for new builds, so if the government isn’t careful, there could very easily be issues affecting both the management of both and new properties, and further complexity trying to buy and sell either (if property developers even bother with building flats at that point).
Due to the uncertain nature of service charges, which understandably do have to exist to maintain leasehold properties, I feel as though I could never comfortably afford to retire whilst living in a leasehold property in case the charge was to rise more than expected. Unfortunately freehold properties are currently out of my reach with my salary and savings, but I am still very lucky to own any home and can hopefully invest and save more aggressively before I ever think of retiring or need to move for any other reason and can then access the freehold property market local to Southampton.
A factor that possibly helped me find an affordable service charge was by purchasing a property where there was no lift (because thankfully I’m able bodied enough to get up and down stairs) as these can cost hundreds of thousands of pounds to repair. My home is also an ex-council flat and whilst there are some in the city with very high service charges I believe it is also a reason why my charges and ground rent are more reasonable.
For anyone who was like myself at the start of this process, I can only tell you to not be as nervous as I was. I was very lucky to have my grandmother view many flats with me to help me keep calm, make sure I saw everything fully and asked the right questions to the estate agents. A home is the most expensive thing you will ever buy, so don’t feel rushed to put in an offer on a property if you would prefer to view the fiat or house maybe two or three times ultimately to make sure you’re doing the right thing. With leasehold properties, of course do make sure you know what the service charge and ground rent is, as many properties may not have this information or even the council tax band not being bothered to be filled in on property search sites.
Now I’m done viewing properties week in, week out it feels like I can finally get back to my normal life with my hobbies and enjoying taking many walks around Hampshire. I’ve just got to do some decorating and get furniture to make my flat feel like home – that’s got to be the easy bit now, right?
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