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buying the freehold

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Newbie
Posts: 7

I like property

« on: March 08, 2019, 09:59:22 AM »

Hi,

I am trying to find out how much the freehold on my flat should be worth. The freeholder has contacted myself and the owners upstairs to give us first offer to buy.
The lease has 900 years and the ground rent is only 12 per annum, so I thought it should,nt be expensive.
They are asking for 6000 split between the two flats.

If we do not want to buy it they will put it up for sale with an agent, but I'm nthinking it would'nt really be worth anything to somebody else as the lease is set and they cannot change anything.
They also seem to be in a mega rush to get this done. Should we try to negotiate with them or is this a fair price..?

Thanks for your thoughts.

Hero Member
Posts: 737

I like property

« Reply #1 on: March 08, 2019, 02:10:08 PM »

A new owner could probably change the ground rent.There are charts that can help you calculate a typical price,Martins money website had one.I have recently had to buy the freehold of 3 studios,which had 65 years lease remaining.Each was 8,750,not counting all the legal fees.The adjoining one bedroom maisonettes paid nearly 12k for theirs.If there are just two of you the legal implications should be much more informal,and you could use the same solicitor or specialist company and share the costs.On the face of it,I would certainly go ahead and purchase.
Newbie
Posts: 7

I like property

« Reply #2 on: March 08, 2019, 06:08:11 PM »

Thanks for the reply. I've looked at the chart you mentioned. The owner of the upstairs flat really thinks they are asking too high a price simply on the basis that the lease is so long.
He also said new freeholders would not be able to change the ground rent but I don't know if thats true or not.
Hero Member
Posts: 737

I like property

« Reply #3 on: March 08, 2019, 07:03:19 PM »

Personally I would never have bought leaseholds if I knew then what I know now.It has been an expensive and lengthy exercise to buy them,but I feel much happier.I was told by a couple of people that it would  increase the value of the flats,in theory anyway,and certainly make them easier to sell in the future.
Newbie
Posts: 7

I like property

« Reply #4 on: March 09, 2019, 06:24:36 PM »

I am told it's always better to own the freehold to your flat if possible.
What do you think the pitfalls are..?
Global Moderator
Hero Member
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« Reply #5 on: March 11, 2019, 11:21:29 AM »

I don't think HeavyKarma was advising against buying the Freehold... that is definitely always a positive. HeavyKarma, I believe, was saying that with all the known issues and complexity and cost that it would be inadvisable to buy Leasehold properties... something I heartily support. My first home was Leasehold... one of these silly ones, where you pay a nominal amount in Ground Rent each year... one other was an apartment... bloody hell, that Ground Rent rises by RPI every 5 years... I got hit with the first increase and it knocked me for six. I challenged the maths... but it's correct... it's not a figure you think will amount to much, but it does.
Hero Member
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« Reply #6 on: March 12, 2019, 06:26:29 PM »

Yes, you are at someone else's mercy with leasehold.My studios seemed like a bargain,no management fees,modest ground rent.Then came the hell of getting the other owners to pay their share of essential repairs,and a new Mrs.Mop role for me cleaning communal areas.I am unsure why Fingers (Jazz pianist?) thinks the ground rent could not be raised by new owners.The financial press and radio have covered the issue of huge hikes being imposed.   
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