What is in this article?
The simple answer is Yes, buying your Freehold will save you paying ground rent and will almost certainly add value and appeal to your property.
Allied Surveyors are experts at providing experienced impartial advice throughout every step of your Freehold purchase.
We can provide an initial assessment and report to enable you or your legal adviser to serve notice. We can also help you negotiate an amicable settlement or, if necessary, represent you at a Tribunal if a settlement cannot be reached.
If you live in a flat then you will not be able to buy your Leasehold alone, you will need to involve at least 50% of the other Leaseholders in the property this is called Collective Enfranchisement.
- Find our more about Collective Enfranchisement.
Truth is no, but it is becoming increasingly difficult to sell a Leasehold house due to market preferences and lenders policies.
There is little difference in cost in purchasing the Freehold over a lease extension.
The benefits of purchasing the Freehold are:
- Ground Rent - Without a lease you normally don't need to pay ground rent.
- Added Appeal - Purchasing your Freehold will add value to your property and buyers perfer Freehold properties.
- Lease Conditions - After you purchase the Freehold, any conditions that existed in the Lease disappear (but not restrictive covenants).
The cautions of purchasing the Freehold are:
- The Cost - While purchasing your Freehold can be costly, it will add value to your property and have long term benefits.
The cost of a lease extension normally depends on these major factors:
- The value of the property.
- The number of years left on the lease.
- The start date of the lease and Rateable Value.
- The annual ground rent.
- The value of property improvements.
- Additional external factors such as Court Decisions.
We can help you to determine how much it will cost you to purchase your Freehold and help you negotiate with the Freeholder.
Allied Surveyors assist with Freehold Enfranchisement nationwide.
Our office specialises in the greater West Midlands area including; Birmingham, Coventry, Staffordshire and Redditch. We also cover Shropshire, Central Wales and the Welsh Border.
- Find out more about The areas we cover.
- 100+ Years remaining – At this stage there is no issues with the lease and you should have no problem selling or mortgaging your property.
- 90 Years remaining – There is still no major issues at this stage with the lease and you should have no problem selling or mortgaging your property. - But you should start to consider purchasing your Freehold NOW.
- Below 80 Years remaining – This is the stage where the real problems start, it is now effecting the market value of your property and “Marriage Value” has to be taken into consideration.
The cost of purchasing your Freehold will now cost you more for every year you delay.
- 70 Years remaining – Your property has now become more difficult to mortgage as some lenders may not give loans on properties with short leases.
The cost of purchasing the Freehold is now significant enough to deter potential purchasers and/or cause a drop in value.
- 60 Years remaining – Your property has now become very difficult to mortgage. The market value of your property will now be significantly less than that of similar properties with longer leases.
- 50 Years remaining – You are now unlikely to be able sell your propery as most mortgage lenders will not consider lending with such a short lease remaining.
At this stage you will be limited to cash buyers and property investors only. By now as much as 20% could have been wiped off the true market value of your property.
- Below 50 Years remaining – Your propery will continue to lose market value until the lease expires.
- 0 Years remaining – Your propery has effectively become worthless, you no longer own it, it has become the property of the landlord.
“Marriage Value” is the increase in the value of a property when purchasing a Freehold or extending a lease.
The value is shared between the Freeholder and the Leaseholder in certain circumstances depending on the legislation applicable to your property.
The cost of purchasing the Freehold will depending upon the legislation enabling you to serve notice and whether marriage value has to be taken into account.
This is a complicated calculation and why you will need our specialist advice.
So why not contact us for further help and advice?