QUOTE(ccslink @ Oct 19 2010, 11:11 PM)
Afaik, freehold land is not necessarily safer in perpetuity than leasehold. If the govt wants it back, the owner has no choice but to surrender 'tho the owner gets some form of compensation.
With leasehold land, if the govt wants the land back, it merely witholds the renewal of the lease & no compensation!
But if the govt has no intentions or future purpose earmarked for the land of properties concerned, it usually renews their lease with a nominal fee.
Lending banks however, look at borrowers applying for loans on properties situated on leasehold land as added risk, esp. those nearer their renewal date & so impose some sort of lending restrictions which appears less favourable to freehold properties. Housing consumers & investors are also inevitably influenced by the view that the lenders hold.
If that is the case, we have to base on the aesthetic value of the house or our first impression then.With leasehold land, if the govt wants the land back, it merely witholds the renewal of the lease & no compensation!
But if the govt has no intentions or future purpose earmarked for the land of properties concerned, it usually renews their lease with a nominal fee.
Lending banks however, look at borrowers applying for loans on properties situated on leasehold land as added risk, esp. those nearer their renewal date & so impose some sort of lending restrictions which appears less favourable to freehold properties. Housing consumers & investors are also inevitably influenced by the view that the lenders hold.
Oct 21 2010, 01:00 AM

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