hi and advice wanted

[timberdog]

Right were do i start?

I live in Nuneaton warrickshire my interests are Falconry / shooting field sprts etc...intro over.

I want to purchase or lease a small buisness my conciderations so far are samll news agents with lottery et.
Or a pet shop / supplier..I like animals no funny comments!!

I do not understand what leashold means thick i know what does it mean i rent? rent to buy???confused..

If i wanted to buy how do i begin to get a mortgage i will have aprox £40.000 in savings to add to whatever i decide to buy?

And what ever i decide to lease or buy anyone got any good solid bread and butter ideas for small buisness?

[Eagle]

If I recall correctly, leasehold is like renting but for a longer, predetermined period of time i.e. 1 year lease, 10 year lease, 25 year lease etc. What it boils down to is that you never actually own the property; BUT you have a 'contractual gaurantee' of tenancy over a certain time. I'm sure it grants you certain other enhancements over normal 'renting' but someone else here will no doubt fill those gaps in!

Hope this helps.

[peterjhale]

thanks eagle - I was waiting for someone

It's like "owning" an apartment

Most are on a leasehold agreement, for say 99 years or so

You pay a ground rent (and normally a service fee)

No rent is involved as you have purchased the right to live in the apartment forever -- after 99 years the leasees need to renegotiate the leasehold again

Someone else owns the freehold

[inbakumar]

From a mortgage/finance point of view there are two types of leaseholds. In general:

(1) Short leasehold : less than 55 years lease remaining
(2) Long leasehold : anything that are not short leaseholds

It is difficult to get a mortgage on a short leasehold property and in any case the lender would expect to see 40 years unexpired term after the completion of the loan. There are specialist lenders who would lend against short leasehold property but they tend to be very expensive.

The long leaseholds are much easier to finance and; longer the lease period is the better. The interest rates payable are similar to freehold properties.

A high street bank would fund up to 70% of the value of a long leasehold property subject to satisfactory demonstration of repayment ability. i-e if the property is worth £100000 then one can get a mortgage of up to £70000 secured against the property.

Good luck with your venture.

Regards,

[MikeH]

HI Timberdog,

Just thought I would say hello. We are based in Coventry which is not a million miles away.

You state that you want to purchase or lease a business. It sounds like you want to purchase an established or rather operational business. If that is the case you will need to look into this to discover whether the business owns or rents the property. I have not heard of leasing an actual business before.

Whatever you do, get a professional to assess the state of the business.

Mike.

[timberdog]

Thanks for all your help..found it usefull..

I am loking for a leashold news agents buisness now as i cannot afford a deposit on com mortgage so keep your eyes out for me

Timbo

[MikeH]

Good Luck Timbo, keep us posted on how things work out and drop any questions you may have into a new thread.

Mike.

[Ian J]

[QUOTE=timberdog]I am loking for a leashold news agents buisness now [/QUOTE]

Good luck - they are hard work with long hours and I'd rather you than me

[MikeH]

Just out of interest why are you prepared to invest so much money into a newsagent business?

Most people that go into business tend to start something that interests them, a hobby or passtime.

Mike.

[Corabar Entertainment]

From a legal point of view (speaking as a former property lawyer!) you purchase property either freehold or leasehold.

Freehold means that you own the land and everything on it for ever more. Leasehold means that you own the property you have leased (ie not the land which the building is on) for a period of time.

I note what has been said about long/short leasehold from a mortgage point of view, but from a legal point of view a long leasehold up until recently was anything over 21 years. However, the law recently changed with regard to registration of leases at the land registry and now all leases over 7 years need to be registered, so there are additional costs involved.

Most commercial leases are short leases.

There are also other considerations to be taken into account. One of the main ones being whether the lease is to be 'court excluded'. Under the law, a commercial leaseholder has the right to renew their lease at the end of the term of the lease. However, if the relevant sections of the Landlord & Tenant Act 1954 are excluded, then the tenant will have no right to renew their lease. Again the law on this changed last year to make exclusion easier.

If you want any more info about freehold / leasehold let me know, I will be happy to answer any questions you have.