Buying the freehold.(35 Posts)
I have just had a letter offering to sell me the freehold of my terraced house for £650. It's currently a 900 year odd lease and I pay £2 ground rent a year.
They claim it will add more value to the house than it costs. Almost all the houses like mine (Edwardian) in this city are leasehold so it's the norm.
The offer is open until July and I could afford without too much struggle but I would notice the money going and cut my costs accordingly.
Do you think its worth it? I don't really know the ins and outs.
You are effectively buying the land your house sits on - the house devalues as the term reduces - not really relevant in your case!
But yes you should consider buying the lease if you have the chance as it will increase your property value owning the land and it's 'safer' that a lease hold property!
I personally wouldn't buy a leasehold property but freehold is more the norm her
Freehold is better than leasehold as the property is then completely yours and would normally make it easier to sell.
However, if that isn't a typo and your lease is actually over 900 years then i'd question if there was any point!
The freeholder gets £2,000 a year from you, and yet they are prepared to give that all up for a one off payment of £650?
Sounds fishy to me.
Are you sure this letter is genuine?
Or am I missing something?
Or am I missing something?
£2 per year. Not £2,000 per year.
Generally FH is better than LH but 900 is a v long lease.
Do be aware however that ground rents can go up.
£2, not £2k?
I'd buy it. It makes things simpler.
Definitely buy it.
(I am a solicitor although not a property one!)
Yep, conveyancing solicitor here. Buy it if you can. Adds value. More attractive to future buyers.
I'm a conveyancing solicitor too. There's no point buying it. Adds no value whatsoever to your property. Presume you're in the north? We have a lot of these long leasehold houses in Manchester. Just keep on paying your £2 a year and you have no worries.
And whoever said ground rents can go up is wrong in this instance. Your £2 a year will never increase.
Yes £2 per year not £2K! No question would I have even bought the house if that was the case!
Yes I am in Yorkshire and it's very normal in this city to have a lease and they are very long. I can't see the house still being here in 900 years!
I think my main concern is that the company that owns the land may be able to mess me about e.g. by putting the ground rent up massively which would be a pain. They offered to sell the lease a couple of years ago for £700 which I couldn't afford at the time.
Looks like some different opinions. I'll have to have a think.
It will never increase? Is that a legal thing? Ignorant here sorry.
Are you sure it's the freehold they're offering? It sounds to me like they might actually be trying to sell you the right to the chief rent, which is a different thing.
Are you in the north of England?
Yes it's definitely the freehold they are offering.
Right - Manchester here. We pay £6 per year in chief rent, despite our house already being freehold. We were offered the chief rent rights last year, but declined. These payments will not be collectable in about 15ish years by law, so they can realistically only rinse you for another £30. The £650 offer may be a last ditch attempt to try to get some value from the rent rights.
So if I'm right about what they're trying to sell you, don't touch it with a barge pole at that price.
Ignore me if it really is the freehold they're selling.
Legally it is fixed in the Lease for 900 years and can never go up. When you apply for a Lease extension if you live that long they can vary the terms of the Lease and put it up then! There is no value in buying it.
It is the freehold they are offering you but still knowing the law as I do around here there is no additional value it would add to your property to own the freehold.
Exactly as busyboysmum says. There is some misunderstanding about long leasehold (as this is). Its essentially very different to say leasehold flats where leases are less than 100 years in lots of cases and you can run into issues when leases get short and there definitely is value to owning the freehold.
With long leasehold (usually 999 years), there is little value to owning the freehold. We have owned 4 different houses and all of them are long leasehold - it is pretty much the norm in the North West with pre / inter war built property.
Just one note to add, and it is only relevant depending on the details of your lease. We are leasehold (99 year) on our flat in London. We recently embarked on a making extension and refurbishment. I have always been leasehold before and never bothered about whether we were freehold. But our experience with our freeholder over this project has made me feel very differently. As a leaseholder, we were required to get a "licence to alter" from our freeholder to do what works. This was massively expensive undertaking. We had to undertake to pay their solicitors fees, their surveyors fees, etc. In addition, the requirements of the license were ridiculous and made us pay out for numbers other surveyors and engineers that we would not otherwise have needed. So, if your leasehold requires this (and I think all of them require freeholders permission) then I would jump at the chance to own the freehold as it will then allow you complete freedom to do what you like.
You can understand that though wiifitmama because you are potentially affecting the structural integrity of the whole block when you alter your flat. Its reasonable for the owner of the building to want to check your plans with a surveyor etc and set out exactly what you're doing in a licence so that if you do something else, the owner has some comeback.
It doesn't really apply to long leasehold houses (although some leases do require you to seek the consent if the freeholder which is a formality usually and about £100).
Yes it's very rare for a long leasehold house to require consent to alterations as namechanged says.
Have you got a copy of your Lease? Your solicitor should have sent you a copy when you bought the property. They should have pointed out any potentially onerous covenants at the time.
As your is a terraced house and probably over 50 years old it would be very unlikely they would have put such a covenant in the Lease. They wouldn't have been expecting owners of terraced houses to be able to afford to make any changes. I don't think extensions were very common in those days.
It is normal for the leaseholder to have to give consent to changes. The fact most people don't bother and most freeholders don't care does not make it a fact.
Ground rents can go up, it is unlikely in this case, but recent new builds have been sold with 900 year leases and rapidly rising ground rents which make the almost unsaleable.
I'd assume someone has inherited a lot of £2 a year and is trying to get the capital value and not have to bother with the paperwork.
Carol you're wrong in this case. The north of England is really the only place in the country that has this type of setup.
The rent cannot be raised. The type of lease you are talking about can but trust me there's no rent review clause in these old 999 year leases.
Also they rarely have consent covenants in them. Honestly. I deal with them every day. Solicitors who aren't from around here often panic when they see them and raise all sorts of daft irrelevant enquiries.
I haven't realised there was a difference between 'leasehold' and 'long leasehold' thanks for the discussion :-)
Join the discussion
Registering is free, easy, and means you can join in the discussion, watch threads, get discounts, win prizes and lots more.Register now »
Already registered? Log in with:
Please login first.