Atlantic Exchange

Home buying

• Matt.peckover

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House Buying Adventures: UK vs US | The Atlantic Exchange

Join Jerry and Matt on this episode of The Atlantic Exchange as they dive into the complex and often confusing process of buying a house in the UK versus the US. From hilarious bathroom ideas to the nitty-gritty details of freehold versus leasehold, get ready for an entertaining and informative discussion. Plus, find out why Matt can't handle the street WhatsApp group and get tips on how to contact the hosts on Instagram. It's a roller coaster of a show you won't want to miss!

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Matt:

And we're live. Um, welcome to today's show, Jerry. How you going?

Jerry:

We're doing quite well. Uh, good morning here. I'm assuming, uh, it was a good afternoon.

Matt:

It is, and here's what's coming up on today's show, I had that idea where I was taking a crap earlier, so I thought, ah, but then,

Jerry:

that's when the best ideas come about. So,

Matt:

yeah.

Jerry:

I'm sure it was a great one.

Matt:

Uh, it was a weird bus journey, but, but you know, still, if you wanna buy a house and it's either too expensive or even in an area where there's a house not for sale and you wanna buy it, if you go up to it and spray on the front door, that will be on the market within a week well, that all sounds exciting, even though we foreshadowed, so technically we don't actually know what's coming up in today's show at this point. It's like time travel, isn't it? It's like back to the future. But I'm sure what I'm sure, whatever we've just said coming up in today's show, I'm sure it's really good. Otherwise, why would we put it in there as a, as a trailer? I had that idea where I was taking a crap earlier, so I thought, ah, but then,

Jerry:

that's when the best ideas come about. So,

Matt:

yeah.

Jerry:

I'm sure it was a great one.

Matt:

Uh, it was a weird bus journey, but, but you know, still, uh, so, uh, we're gonna crack on.

Jerry:

do, uh,

Matt:

no, we're not.

Jerry:

in the UK have toilets?

Matt:

They don't, they do not. Coaches do buses. Do not.

Jerry:

it.

Matt:

buses in

Jerry:

ass buses.

Matt:

the buses, uh, in America have toilets.

Jerry:

Other coach buses. Yeah.

Matt:

coach. Yeah, a coach. If you're going long distance. Yeah, long haul. Yeah. A coach. Coach is long haul, normally has a little TV screen so you can watch sort of thing.

Jerry:

be fair, a bathroom is what you make it,

Matt:

That's true, that's true. I mean, I've some, I've seen some people on the night bus and they've, they've definitely found the toilet. So

Jerry:

They just have, they have a better imagination than we do.

Matt:

They do. They do. Yeah. So that's not what today's subject is, is it?

Jerry:

It

Matt:

think it is. It's not taking a crap on a bus, is it? Let me check my notes. I, I, I believe that's next week, I believe. Today we're gonna talk about, uh, purchasing houses. Uh, the difference between purchasing a house in the UK and the US'cause I'm sure it's, it's stress free what whatever country you live in,

Jerry:

Yeah. Yeah, I'm sure. I'm sure especially now, doesn't

Matt:

I.

Jerry:

where you are, it's just more expensive as well.

Matt:

I mean, I'd like some of our, um, some of our listeners to write in and tell us what country they're from and also how they buy houses like all over the globe. I'd like to hear those stories, which reminds me if we always say this, we don't actually give any details how to contact us. We are on Instagram at Atlantic Exchange Pod. You can contact us there. There are other means of social media. We just haven't been bothered to set'em up yet, but for the time being. Fill your boots. Um,

Jerry:

Yeah,

Matt:

I, I was actually looking at our stats. Do you know we have a listener in Asia?

Jerry:

we do.

Matt:

We do, I don't know. Hello? I dunno where in Asia. It's only given me con the, the Jewish continent. So I'm not gonna mock an accent because A, um, that would be racist and get me canceled. And also I could be thousands of miles off. Asia could technically be parts of Turkey.

Jerry:

exactly? Did did it. It didn't say the exact country.

Matt:

It just said Asia. I dunno if I can drill down. Technology is new to me. Um, but I'd be interested to see, and I, I think they've listened to more than one episode. So they, they've either got completely the wrong podcast and they're thinking, oh, this parenting hell with Rob Beckett and Josh Whitaker. It's not the podcast I thought it was. Or they, uh, they're really enjoying this, uh, Atlantic Exchange banter going on.

Jerry:

I, I, I hope so. I hope they remain and refer us to friends.

Matt:

And I hope they, please, please tell your friends about us and let's, let's double those. Listen figures, figures in Asia, you never know. Cut to next year we might be doing a tour of Asia.

Jerry:

that's true. Very unlikely. But yes,

Matt:

Yeah. I'd like to dream big.

Jerry:

the most, by the way, Matt is the most enthusiastic, uh, non-realistic Brit out there.

Matt:

Oh yeah, definitely. I, I, I'm, I daydream. I, yeah.

Jerry:

Oh yeah. You are an absolute daydreamer.

Matt:

was already thinking about how, uh, next month we go to Liverpool to meet John Cena, how I'm gonna pitch business ideas to him. So how, how do we get him on this podcast?

Jerry:

would love

Matt:

Yeah.

Jerry:

there's a line of a thousand people

Matt:

Me pitching some,

Jerry:

walking, like Shark Tank.

Matt:

yeah. Dress like Alan Sugar. Uh, it's a house buying. So, uh, do you own a house?

Jerry:

I do own a house.

Matt:

Great show. See, see you next week everyone.

Jerry:

Sounds good. And, uh, the process was shit. How about you, Matt? No. Yeah, I do own a house,

Matt:

I do. And

Jerry:

The, the process is tedious. How long is it from when you put in the initial offer, uh, to when you actually, uh, sign the contract and, and the, and then the keys are passed to you on average,

Matt:

it's about three times as long than the solicitor says it's gonna be. So they always go, oh yeah, we could be.

Jerry:

conservative.

Matt:

Yeah, they always go, oh, we could be ready to exchange in, uh, in about four weeks. Four weeks come by And you haven't received your initial documents? Um, I would say three months is the quickest I've ever moved. Yeah. Yeah, the quickest.

Jerry:

that's on the tail end in the us

Matt:

Oh, okay.

Jerry:

at the pretty long time.

Matt:

just wanna get this shit done quickly, don't you?

Jerry:

Oh God. I mean, yeah. One would hope. Normally it's a month, a month, maybe a

Matt:

no, no,

Jerry:

a

Matt:

no, no, no. So we'll go. It is, it is about 90 days.

Jerry:

Right.

Matt:

Um, and it's a painful process. So I'll, I'll, I'll walk you through the, the British, well, actually no, I'll walk you through the English because it's slightly different in Scotland and Wows and I don't know those, so I don't wanna lie. Um, but in England, um, so you, you go and put your offer in and then the seller has to accept it. Now they. They can decline any offer they like. They can decline. They can decline it'cause they just don't like me. Which, which is similar to job interviews if you go back to, uh, last week, last week. Um, but it might be that, say they've got it up for, so the, the UK average, average price is just, is about a quarter of a million roughly. It's quite hard to gauge'cause obviously house up north, uh, I'm not gonna get into a conversation about the North right now, Jerry, we, we haven't got time, but up north they're slightly cheaper.

Jerry:

in a couple

Matt:

Yeah.

Jerry:

no one, hopefully no one's heard this podcast in

Matt:

Yeah, there's some people from Asia coming over to the Liverpool. Um, and also like in London, obviously it's crazy prices, but it averages out about quarter of a million. So say I put my bid in, they're asking for quarter of a million. I put in quarter of a million. It used to be years ago that you always bid over the asking. It's not so much like that. Now you can, you can pretty much bid that. Again, it all depends on the area. If it's like a flat in London crazy office, um. Now they've gotta accept. Now, if I haven't sold a prop, my property and I'm not in a position to move, they're quite rightly say, no thank you. But then if they haven't had any offers for six months, they might go, okay. Um, so let's just say I've, I've sold my house, I'm in this position. They accept, right? So now they can take it off the market. They might do that. The estate agent might ask for proof of funds or check that I've got a mortgage offer for that amount. Just so check that I'm not, uh, a whack job just trying to. Buy houses and I haven't got the money, then I've got to uh, uh, I've gotta engage with a solicitor, uh, a lawyer for our US friends, but they're called a conveyancer. So a conveyancer is someone that foul law school, I believe, and they can just do property law. So

Jerry:

Right,

Matt:

what they would do is, um. You, you, they have different fees, but let's say they're between 500 a thousand pounds and they would just deal with the paperwork. But when I say deal with, they would completely ignore all the questions you send them. At the same time, they would also. Miss all the vital in information that you're a requiring. Um, they might send out a pack to the seller and likewise, and I'm gonna probably get this from the buyer of, of my property, and I have to fill out a load of things on it. So it could be things like how many bedrooms, what's included, um, and then you go and get searches done. So then you pay for these searches to be done. It's a really strange one. So there's the basic ones where you can send someone to do a foundational search on the house, but always, every time I've done it, they come back home and they paid for it. Well, we can't actually check the foundations because we can't dig up a house. They know that because. But yeah, they still charge for it and they come back going, so anything we could say has to be verified. So basically it's like they gall clause. So they're saying the house seems okay, but it could also fall down and we're not liable. So you get those searches done. Uh, the mor, if you're getting a mortgage, the mortgage might ask for a valuation check just to check that if it's worth the money you're asking for. And then sometimes you get all these other searches, like local area searches that all dependent on the area. Like I had to do one, uh, to check if I was liable to pay for the local church roof if it collapsed. Um. These sort of things like, and apparently I am, so if the local church roof collapse, everyone in the area has to chip in to get it paid. There's so many silly little searches like that. Uh, so you pay to get all them done. They get done. And it could be things like, is it, is it built on an area flooding? They do flood searches as well as I was up a hill.

Jerry:

Mm-hmm.

Matt:

pig's, pepper pig's house at the top of a hill. So I'd be surprised if it did flood. But again, the mortgage company can. Insist on it once that's all done back and forth between solicitors. Um, and it's things like, oh, I had some windows changed 10 years ago. Can I have a certificate forum? No.'cause I probably throw'em out. So it's back and forth trying to dig that out. And it's these things that take forever.'cause they send a, an e, a, an email, a letter, and a week later you send it back. Then they come back with something else and this is why it's taking three months. Eventually get into a position where, right. We're ready now. We're getting close. And you think this is now any, they go like any day now, which means any month now. And then, so once you've got everything sorted, you come to exchange. So there could be a chain, there could be sort of six people in this chain'cause everyone's buying someone's house. That exchange of contracts is basically, you agree on the date it's gonna gonna sell, and then you exchange the contracts. Once you've exchanged, now you're committed. So you can pull out up to the day you exchange, normally, exchange to completion, Gil will take, it's about a week.'cause then you've gotta give time for the mortgage companies to transfer the funds and get that ready. But it, it technically you could exchange complete on the same day. Legally. There's nothing stopping you. But it's normally, typically about a week. Um.

Jerry:

Yeah, that's, it's, that's a lengthy process. We have similarities, obviously there's home inspections. Um, the cost of title and the legal aspect behind it. Right. but historically, the, the realtors here are pretty aggressive. they're, they're pushing that process along the way because they want to get paid as well, I'm assuming it's similar. Um, and they're just kind of sitting on their hands in the

Matt:

see, they, they do all the, all the, well, they call it estate agents here,

Jerry:

mm-hmm.

Matt:

all they do is just email you and say, is there any update? And that's really all I feel I've ever had from estate agents, so

Jerry:

No, no. My

Matt:

I.

Jerry:

real estate agency, or they'll, they'll schedule the home inspection on your behalf.

Matt:

No, no, no. They, they, they would do the viewing and sometimes I've had to do the viewing myself. They do the viewing, um, and then that's it, and then it is all over to the sort of solicitors to do it. So they, they get, they, it's an e it's an easy, it's an easy money. Um,

Jerry:

Yeah.

Matt:

it's, it's for the money you can get paid for the actual hours of work you do. Could be a good profit. I mean, and what strange is, obviously they're called realtors in uh, America, and you need a license to do it. Is that correct?

Jerry:

Correct. You do need a license to do it. It is, it

Matt:

What license still? I'm not, I'm not driving. I'm not, I'm not operating a firearm. I'm licensed What? To show someone around the house what my, what's my license to get me.

Jerry:

I, I think it's more than that. I, I think it's to also understand all of the items that you just mentioned, the home inspection, uh, some of the legalities behind it. Mm-hmm.

Matt:

So it's because you are,'cause you are getting involved in more the finances. So do you still have a, uh, a legal person involved, like a lawyer or a solicitor? Are they involved as well?

Jerry:

And you can provide your own, but historically the, the realtor will, will provide one for you.

Matt:

Okay. And if I cut to American movies, they always put on like an open house. Um, we sometimes have open houses here, but they're not open houses. An open house here means what it'll do is,

Jerry:

by and see an open house sign and

Matt:

yeah. But.

Jerry:

in to see what the home looks

Matt:

I've never done it because I don't drive around the US that often. But an open house here, when they, when people say they have an open house, it just means they're can do all the viewings on the same day, but they're never at the same time. So it might be an open house here. Could be, right. You are 12, you're 1230. You are one. You are one 30. And they just wanna do the viewing for one day. Where in America it's literally an open house. You walk in, have a look around, pick up a leaflet. I like this. Uh, have some of the cake.

Jerry:

yeah, yeah,

Matt:

And you walk out, don't you?

Jerry:

yeah,

Matt:

Is is it always like that or Some of them private viewings. Oh, okay.

Jerry:

are, there are, there are both. And, and I think the private viewings historically are more so for higher ticket homes, right?

Matt:

Right. Yeah. Yeah.

Jerry:

Yeah. But th this house here had a, uh, had an open house and we bought it right at the beginning of COVID, which was an absolute mess. Right. there was a line out the door, probably 25, 30 people by the time we got here.

Matt:

And are most, is it are most open houses like that, or it's just this was a great house for the money in the area.

Jerry:

right now? Um, depending on the area for sure. Absolutely.

Matt:

What is, uh, so if you wanted some move in this area,'cause obviously you are, you've got good links to, to Manhattan and Jersey City.

Jerry:

Yeah, yeah,

Matt:

Uh, if a house went on sale, would it sort of sell pretty much that day? Would an offer be in by the end of that?

Jerry:

The home, the, the home that we're in now, uh, was, was put online on a Saturday, was put on the market on a Saturday open house was Sunday. They accepted our offer Monday,

Matt:

Okay.

Jerry:

and, and we had, we had an offer over asking, which is actually pretty normal, uh, where I'm at.

Matt:

Yeah. As I said, it is slowly, it's got down to the point where it's, I haven't seen that so much recently. Sometimes, um, I have where it's just, it's, it was in a prime location, but. I haven't seen it as much as it used to be. I do have a top tip for anyone listening that wants to buy a house, so house prices are quite bad at the moment, but I found a good way if you wanna buy a house and it's either too expensive or even in an area where there's a house not for sale and you wanna buy it, if you go up to it and spray on the front door, that will be on the market within a week and at a decent price as well. Yeah.

Jerry:

It, it will,

Matt:

Yeah.

Jerry:

it will. Now, once you move in, the, the stench will be there for a bit. But what are you gonna do? You

Matt:

Yeah, you are not, your neighbors aren't gonna come around for a while because the house is tainted, but you know, yeah. Especially, no one's gonna let their kids come around and play.

Jerry:

How, how are you, how are you? Uh. When someone else buys a house in your, in your neighborhood, or even when you've, like, how were you received when you walked in to your new house? Do you introduce yourself to the neighbors? Do you try to get acquainted?

Matt:

I don't, I didn't actually get to know a lot of my neighbors until COVID, and that's saying something'cause my parents live in my road. But, um, but when someone does move in now.

Jerry:

British sentence

Matt:

Yeah. Yeah. But when someone does move in, it is pretty much moving day. You're looking out the window like what they got, who they, who they got. They got young family, they old people, what's going on? Um, and then there's the, there's the street what WhatsApp group that goes around. So if you can, I'm not on that. I'm, I'm not allowed to be on that because

Jerry:

on the, you're not on the Facebook Moms group.

Matt:

no, I'm not allowed to be on the WhatsApp street group'cause um, I could tell people to fuck off too much in our road. So.

Jerry:

I could see that. I could see you doing that.

Matt:

I'm not the face of the operation. So put it that way. In this household, I'm not the face, I am, I'm doing stuff in the background, making sure that, you know,

Jerry:

in the background.

Matt:

you know, insurance is in place, making sure all the, all the stuff ticking by and the house is running. But the face of the house is not me. I'm not the CEO of the operation.

Jerry:

Yeah,

Matt:

And quite rightly, quite rightly, um, yeah. So talk me through, I wanna buy a house in America, obviously. Talk me through it. What, what's the, what's the start to end process?

Jerry:

It's, it's all, it's all the, all the items that you just mentioned. Um, it's just moving at a quicker pace

Matt:

Yeah. And there's no reason why it shouldn't. Is there?

Jerry:

Yeah. Yeah. Um, I, the only thing I would add is just water inspection. So there's a lot of areas here that get flooded.

Matt:

Yeah.

Jerry:

Luckily we're not in a flood zone, but they do have to assess if you need flood insurance. There's property taxes, um, that need to, um, that need to get assessed as well if there's been any additions to the home. Um, and then obviously, just because a lot of homes are older, uh, I mean, not UK old, but I guess old here

Matt:

Because America's known for being one of the oldest countries in the world, isn't it? Yeah. Yeah.

Jerry:

60, 80, a hundred years old.

Matt:

Yeah.

Jerry:

Especially in more desirable neighborhoods. Um, you, you probably have to get permits, uh, just to do some changes, which is a huge differentiator from the uk. What, what's the host? If you wanted to add a pool to your backyard or a deck, do you need a permit? Do you

Matt:

No, not so much

Jerry:

government and, and, and get some sort of okay

Matt:

there. There's, there's probably about 1% of people in the UK that are adding pools onto their, into their yard. A because

Jerry:

right.

Matt:

they're expensive. And also we don't really have the weather for it. It's, it's not common that you come to a house with, with a pool

Jerry:

wanted to add a deck?

Matt:

a deck. You just go and do that. That's fine. There's no, nothing needed. So what it would be with, um. Permits are normally if you're doing an extension to the house, like actually building out onto it and making the house bigger. Um, if you're building like a, let's call like a summer house, those sort of log cabining things, you, they don't need anything. Um, especially as the companies know, they build'em to a size where they're not. So they can be as big as they want, like footprint, but they have to be under, I think it's 2.8 meters. So as long as roof height is below that, then. There's no permit needed. So it could be sort of a six by six meter room in your garden if you've got the space, but as long as it's under 2.8 meters, it's fine. And that can go up to the fence line at, at that height. I think if it is bigger than that. So let's say it's like a, a double story again. I think that's fine, but then it has to be a certain amount of meters away from your fence. Um, and it can't be in the front garden. It can only be in the back garden as well. So it is all these sort of things that you can't do anything in the front. It can all be in the back where it's fenced off. It's strange things like this, but no permits are needed, so. Stuff like that. Um, I did some stuff where we knocked some walls down inside. Permits aren't needed for that, but if I was actually to extend the house and build out on the footprint of it, then yeah, I'd need a permit. Um, you go to property taxes, so yeah. I forgot to mention, so when you, when you buy, you have to pay a premium tax on a house as well. Do you have that as well?

Jerry:

We do not know.

Matt:

So it is, it's, uh, it's, it's a sliding scale, but it, I think it's free up to 125,000. Then there's, it might be 3% up to quarter of a million, and it goes up like that and you, and you pay the addition on, on that. So the, the route of like a sort of taxing system. And then if it's your second home, there's like just a, an automatic 3%, whatever that rate is, 3% on top of that as well. So it's. It could be sort of 10,000, 15,000 pounds extra on, on your cost. You've got, you, you've just gotta plump out and you can't put that on the mortgage either. So it's not like some costs you can put onto the mortgage, like some fees, some mortgage fees, but, but that's straight on, which is another hard hit. That's why it's, they, they people, the people are moaning that you can't get on the property ladder, sort of mid thirties in the uk'cause you'd probably need 50,000 pounds sort of deposit, deposit taxes. Fees, uh, solicitor fees, probably about 50,000 just to sort of get maybe a quarter of a million pounds flat.

Jerry:

Yeah, the, that initial premium is not,

Matt:

Not ideal.

Jerry:

especially for younger buyers.

Matt:

Yeah. Who has, I mean, who has 50,000 pounds sitting about, you know, so it takes a while to save the up really, doesn't it? So, um.

Jerry:

I, I, I guess also the feeling of when you first buy that house, it's, I don't, it, it, it feels like you made it right. It, it kind of seems like in the UK it's like, oh, this, is this a financial mistake?

Matt:

Hmm.

Jerry:

You're sort of second guessing yourself.

Matt:

Yeah, definitely.'cause then you're committed, aren't you? So, especially if you're tied in with a mortgage, like my, your mortgage could be locked in for five years, so you can't sell the house for five years without some really hefty penalties. So you know that you've gotta, you've gotta lease stay in that house or stick that commitment. But I suppose it's to say if you're renting anyway, rent normally more than a mortgage anyway, so

Jerry:

it is. It

Matt:

it's, yeah.

Jerry:

term, your mortgage payment will stay the same.

Matt:

Yeah.

Jerry:

con continue to go up,

Matt:

Uh, you say that, but obviously rates rates are increased since, uh,

Jerry:

Yeah.

Matt:

I dunno, it's since COVID or since we had a Prime minister that lasted 20 days every, I think it was probably from list trust rates just shut up. Um, and we had a sort of, a bit of a global inflation problem as well. But, so the rates went horrible. They're starting to come down, but there, there, there's been points when it was, especially in COVID, that they're just trying to get people spending. The rate was zero. So like your mortgage could be your mortgage, could be your mortgage, could be free. Or it might, some of it might track like a quarter of a percent over the rate. So your, your mortgage rate was like 0.25, so you're paying like a a hundred pound mortgage. But yeah, now sadly, you're not.

Jerry:

That's, that's the issue that I find myself in. Our, uh, we're locked into a very good rate. So it's difficult to, even if we want a bigger space and we're looking at homes, we have two kids now and we bought this house planning to have kids, which is helpful. We could be here for a while, but we are looking at bigger homes. The problem is, do I want to, you know, from such a low rate to a much higher rate on,

Matt:

Uh, yeah. So can you transfer,

Jerry:

payments.

Matt:

can you transfer that mortgage on that rate to another property?

Jerry:

No, no. There are some programs that do it, but it's incredibly difficult

Matt:

Right. So I think I could transfer, but say I needed more money. Normally when you're moving up, you need more money. Then the, the additional one would be a higher rate. But I'm coming to the, I'm coming to the end of my very attractive rate, which I've had for a long time, and mortgage rates aren't great at the moment, so I'm really hoping these listeners we have in Asia somehow monetize this business and that pays for my mortgage.

Jerry:

The, so

Matt:

Yeah.

Jerry:

that's, that's also interesting. Those, those, uh, structured mortgages aren't really popular anymore in the US where in the UK you could have a very low rate or sort of like an intro rate for five, maybe 10 years or less, then you have to refinance. Prior to that mortgage rate going up, or you're just stuck with that higher rate. Is that true or,

Matt:

Yeah, so it's not really an intro rate. It's more that's, so say, let's say the rate at the moment's about 4%. So you get your rate of 4% and you lock it in for a certain amount of time. You say I want it for two years, four years, et cetera, depending on how the rates are going. Um. If the rates are quite low, you might not get such a, it might be a slightly higher rate if you're looking for longer term.'cause they think, okay, the rates might may increase and they get more money that way. By the way, you lock it in and at the end of that term, your mortgage ratio doesn't end. But then it jumps up some stupid rate, which is. It could double the rate, it could jump up to 8%. So what it does is once that term ends, you are free to, to move to another one. So then you, you go and look and see what the, the local, the best rate is at that time. And you, and you get that one. I mean, I dunno, I don't think anyone's forgetting their mortgages coming to an end and just accidentally paying the, the three, you know, the double amount, the, the 8%. But it's kind of like, if you don't fix it, you, you don't just default to the, the best rate at the time. It's they, you go to a silly rate. So what, how's it work then? You say it's not like that with you then so,

Jerry:

no, no. So I mean, there are options where you can do that here, but historically you're just looking at a fixed rate for 15, 20, or 30 years,

Matt:

and it won't change in those 15, 20 years.

Jerry:

and it just won't, you're just sort, you're locked in. Again, we have structures that will essentially bubble, right? Uh, the first five years, it'll be a very solid rate, and then you either have to refinance or you're just stuck paying a higher rate after set time.

Matt:

What's the, do you know what the, the. Rough going Interest rate is in the US at the moment.

Jerry:

Yeah. Yeah. The fed rate is sitting at 4.1, so mortgage rates are around that 4.2, sorry, 5.2, 5.5 to six, depending on your credit.

Matt:

Yeah. Okay. They track quite a bit higher then, don't they?

Jerry:

Yeah, for

Matt:

A percentage. 1% higher. Yeah. Okay, so similar rates we're about, I think we're 3.75. Depends when this goes out,

Jerry:

Yeah.

Matt:

but,

Jerry:

cut rates this year.

Matt:

okay. I can get our team to look up the interest, interest rate, but

Jerry:

Get, get Jamie on

Matt:

Jamie's on that. It's just, it just seems late today. I dunno where he is being, yeah,

Jerry:

I, I am a very simple American and there's still something I can't wrap my head around. What is the whole freehold slash leasehold situation

Matt:

It's on my topic of conversation. I'm glad you brought it up so I take it, think.

Jerry:

absolutely kills me

Matt:

So,

Jerry:

that

Matt:

so I'll explain the difference for our listeners and yourself, and you can tell me if you anything similar. So there's two things, freehold and leasehold. Freehold is a, now it, it could be different situations, but normally you'd find that within a, let's call it a house or semi-detached house, leaseholds are more in a flat or an apartment where there's multiple, multiple buildings within that building. Because what it is. With a freehold. You own, you own everything. You own the bricks, the outside, you own that building with a leasehold, although you are buying it and it's, it looks as though they're same much money as freehold. You're really only buying the, the air and the space in those bricks and the internal walls, but the actual, the actual building isn't yours because it's really to, it protects the buyers. Because if you think, if you were in a. Uh, a flat and the flat above just collapsed in on itself. You'd be thinking, well, hang on, that's damaging my property, but why, why am I having to pay to repair it? So that's why, um, that's the main thing. And also the leasehold, my may charge you ground rent.'cause there could be communal grounds and then they wanna, you pay some money and they fix the communal grounds.

Jerry:

this land?

Matt:

There could be a freeholder. So normally if it's new, builds a building flats, the, the, the building invest of the house. There'd be the, the, the, there'd be the freehold owner of that because they own that land and they build these flats on it. You buy the flat and then you pay ground rent. And that's kind of a main, and or, and sometimes a maintenance charge. And that's to keep all the communal air or the communal hallways as well.'cause you might have a communal lift again up to your flat again, if that broke, it's, you need that sort of central ownership to get that fixed. That's the main idea of it. Now you can sometimes see, if you look in, if you go on right, move away, the property searches are, you go in London, some nicer, like not in hill. You could see like a, a really nice flat for sale, but it's like. It's like 60,000 pounds. You're thinking why? Why? Because there's only about five years left on the leasehold, which means a no mortgage company will do, will give you a mortgage on it. They want solve a minimum a hundred, 200 years and then to renew the the, and in five years time you just dunno that how that flat anymore, it's just gone. Then to then extend the lease hold on it for like another a hundred years that could then cost maybe half a million or something stupid like that. So it's, it's.

Jerry:

are you paying this to? To

Matt:

Who,

Jerry:

to the o

Matt:

who, whoever owns whoever owns the whole building. So you think, you look at, you look at a flat or apartment, it's, it's in a building, isn't it? It's, it's, it's not literally just containers built on top of it. So whoever someone owns that building and within that have a flat. So really it's, it's, I dunno what, what's, what's the similar situation in, in America if you've got flats for instance? How does that work?

Jerry:

I mean, you pay an HOA, so you pay a fee for servicing of the building and there's insurance involved, right? So look to your, to your point, if the, the flat above collapses into your apartment, right. You just have property insurance, we have homeowners insurance, essentially, that'll sort that out. I just, the, I I guess here you never really truly own your home if you're still paying property taxes, right? It, it's not To some extent, no one really owns it if you're still paying property taxes. But, but the thought of, I don't own the land that my physical home, like, let's say it's a single home I've even seen with detached properties in the uk. That there, there could be a difference between freehold and

Matt:

that's, that's very rare. It's very rare. Normally it's on a flat'cause you think you can't own them. If you're especially in the middle flat and there's a flat below you, well, you can't own the land that your flat's on'cause there's a, there's someone below you. So that's what, that's where that comes in. It's normally in an apartment or a flat. Um, if it's a single house. On a detached house on a land, I, I couldn't see it. But also what you can do, you can actually also be a share of freehold. So say there's three people in a flat, they can actually own the three hold between them, so they sort of all own a third of it. So sometimes you see that you might, you might see share of freehold, but yeah, lease hold, it's a. And then you have that the manage, like what you call the H Ho A, it's like that. And that's like a committee that's set up and you sort of all vote on that and you, you vote how the spending's done and it makes, selling a leasehold flat is a lot harder than a freehold one.'cause then you have all this audits have to be done at the lease leases.

Jerry:

Yeah. Openly still incredibly confusing. Uh,

Matt:

Yeah. And I think on that note, I think we've, we've, I think we've confused our listeners. Uh, like what we like to do is we like to leave you more confused when you started, don't you? So that you know that by the end of this, you know, how not to purchase a house in two countries, which is, this is probably why our listener based in Asia,'cause we are not confusing them.

Jerry:

Wait, la last question. If you have a moment, what is your ideal home?

Matt:

I, I dunno that answer. I mean, one, I don't have to pay for, I'm not, I'm not sure the answer here.

Jerry:

right. No, I mean, you know, what are some of the must haves

Matt:

One without. I, I don't like pedophile sprayed on the front door. That's, that's really, yeah. Yeah. Um, I, I like parking off street parking. I don't want that, um, anxiety of having to put up outside, front of find somewhere to park. I know that I could just put up and park on my drive. Um, a garden's nice that I don't use. Um, uh, yeah. What about yourself?

Jerry:

Uh, obviously I need some space. Um, I'd like a good yard just'cause I like having a pool, um, driveway with a garage, it snows here. It's easy to just get in and out, right? Uh, but the most important for me is I like having a walkable neighborhood. It'd be nice to, to be able to, to walk three, four blocks in their shops, cafes, restaurants, bars, uh, that we can take an afternoon, evening stroll in,

Matt:

No, I get that. I'm, I mean, I, I, I don't live in London, but I can commute to London where some people I think on earth go,

Jerry:

right?

Matt:

oh, I have to live in London, I think, but I know people in London, it took them longer to get to the office than it took me to get to the office who lived in Kent, because I had better transport links. So that didn't really work, did it? So.

Jerry:

Yeah. It's similar to me. I, I live 30 minutes from my office in, in Manhattan, and there's folks that live in Manhattan that take 40 minutes to

Matt:

And do you have a decent night bus into the city from your house?

Jerry:

Yeah, I have both. So I have a bus and the train.

Matt:

Okay. And can you take a crap on both of them?

Jerry:

I, this is America. I can do whatever I like. No. Uh,

Matt:

God bless America.

Jerry:

it, God bless America. I can do what I please. America?

Matt:

What, what and what amendment is that? I can't remember The amendment where you could crap anywhere you liked.

Jerry:

taking amendment. I'm not quite sure what the shit taking amendment is. I'm sure the, we, Jamie, can you pull up the constitution? No. Um, uh, yeah, the, the train has toilets, so it's pretty solid. Uh, the bus not so much. Yeah.

Matt:

Well, that's our, that's our travel tip here. If you are prone to shiting yourself, get the train.

Jerry:

Correct, correct. Or, or have an imagination. Baby. The world is yours.

Matt:

Yeah. Okay. On that though, I think, uh,

Jerry:

Yeah.

Matt:

we'll catch up next week. All right. Have a good week, Jerry.

Jerry:

up next week, sir. Cheers.

Matt:

Thanks for listening. Bye.