Leasehold properties

[Amy3500]

I live in a house I have a mortgage on and I have lived here 5 years. I was nervous about buying a leasehold property but after speaking to a solicitor and ensuring it had a long lease we bought. As the property is leasehold we pay to a company a rental amount of around £4 a year. We don’t have any contact except a letter than arrives and we pay by an automated service.
The company has written to us and offered us to buy the leasehold for £700.
The letter states we don’t need a solicitor ( unless we want one) and they would sort out the legal side and information passed on to the land registry.
As we still wouldn’t own the freehold of the property we are struggling to know if there is any benefit in doing this? Is there a benefit if we came to sell for example? Is this just a way of the company raising money as the company may be in financially difficulties etc? ( As presumably they have written to everyone in our area.)
Initially we had thought they were offering us the freehold but a small clause on the back states that the freehold will still require us to pay rent and we would in future be responsible rather than a 3rd party as we currently do. Could do with some help understanding what we would be buying and if we should proceed. Thanks

How old is the house?

I guess if the ground rent, if that's what it is, is £4/pa it's not a new build.

Assume it's definitely a house and not a flat/maisonette or similar.

Not enough information at present to understand the issue.

Seek advice bases on what the letter says.

Are you in England?

But you already own the leasehold. So what exactly are they offering you?!

Perhaps they are offering a share of freehold?

What you've written makes no sense. What exactly are they offering you for £700?

It’s a 1930s house. The letter doesn’t say anything that helps me understand why I would buy the lease as I won’t own the freehold. I presume the 3rd party company I have dealt with for the last 5 years will tell me who to pay rent with if I buy it as I don’t know who they pay it to. My solicitor when I bought the house wasn’t at all concerned about us paying the rent to the 3rd party( think quite common in the area). I’m just not sure if it’s better to buy in terms of if I needed to sell or makes no difference as I still won’t own the freehold.

They are offering us to pay £700 and in effect become the person who pays the rent to whoever the freehold is paid for. That’s exactly why I’m posting, they have written to us out of the blue and offered this. We wouldn’t own the freehold we would be directly paying whoever they pay and the land registry would be updated so they are no longer the 3rd party that collects the money.

No they are not offering us the freehold. The letter was misleading ( I think) and I assumed that is what they were offering but the small print says we would just be removing a 3rd party and from then on pay rent directly to the person who owns the freehold.

Yes in England. I realise it’s confusing as I’m confused. I showed the letter to a friend who doesn’t specialise in property law and she said she was unsure what to advise me.

Well I'm baffled. I too bought a leasehold house (Victorian, NW England, very common) with £4 a year rent. I bought the freehold a few years ago for £600.

I think you should query this. If you're buying the freehold it seems pretty standard. If not, what are you buying?

I am a head lessee. I collect ground rents and send them on to the freeholder.

If that's what they're offering you, to send your rents direct, don't do it. For the amount you're paying, £4pa, you could buy your freehold outright for maybe even less that £700. Ring them and ask them who holds the freehold to the land.

Who owns the freehold? Why can't you pay your ground rent to them direct anyway? Why on earth would you pay £700 for the 'privilege'? Who sends the ground rent notice i.e. what is the actual name of the freeholder on it?

You’re not the only one baffled. If I could buy the freehold I would jump at the chance. At £4 a year rent it would take me a long time to pay £700. I think I’m more confused about what happens if I don’t buy it and everyone else does etc. I can’t currently see any reason to pay them £700 but just wanted some legal advice if it would actually be beneficial to us ( in some way I can’t see). Other than the yearly request for £4 I have never had any contact with the company, including at the point of sale!

You'd be wasting your money. Better to save up and buy the freehold.

That’s just how it has been set up and all houses in the area, which at the time the solicitor dealing with the house sale said was common when we queried it.

They are probably the head leaseholders.

That’s not an option I don’t think as I asked when we bought the house, although this letter made me wonder if something may have changed or if this is just the 3rd party trying to rid themselves of the job of collecting £4 a year and collecting £700 by everyone as a one off fee.

Thank you I may try that.

If you're a long leaseholder, and it's more common than you'd think in England and particularly S Wales, then provided conditions are met you have a right to buy the freehold. The link below is a quick overview but no more:

https://www.lease-advice.org/advice-guide/houses-qualification-valuation/

You need to take the paperwork you've had to somebody for proper professional advice.

NB: The info above relates to houses - flats/maisonettes are a different cup of tea.

A lot depends on the period of the lease. But if it’s £4 it’s probably a very long lease.

Sounds like our first house, in Eltham, London.

There was initially a 999 year lease on the property, I think we had something like 950 years left on it. Ground rent of £4 per year. We were offered to buy the lease for about £700. (These are approx figures, it was about 35 years ago).

I couldn’t see any benefit in paying 175 years of ground rent for the freehold.

We had absolutely no problem selling the house on. Buyers weren’t worried about an over 800 year lease.

In your case, I don’t see any benefit to you, you’d still be paying the £4 each year, but just direct.

For tidiness, it might be nice to have the lease, maybe £200, but watch out for legal fees/ arrangement fees.

Personally, I wouldn’t bother.