Purchasing the Freehold of a House

[Hippogriff 10]

Good day all,

 

I have become interested in purchasing the Freehold of my house. I have owned it since 2000, it was built in 1995, and has 106 years remaining on the lease. The annual ground rent is a nominal £60 per year.

 

My expectations of the cost of purchasing the Freehold have been set (through research) at somewhere between 20 to 30 times the annual ground rent - so, somewhere between £1,200 and £1,800. Not including legal costs, of course. I believe my research has concluded that if the price requested by the current freehold owner is more than 30 times the annual ground rent, then it is considered to be somewhat unreasonable and you can then go to a Tribunal with confidence of being successful - though I expect that is not what anyone wants to happen.

 

I am just enquiring here as to whether anyone else might have done this - recently would be most useful, I guess - and whether they might have any recommendations as to Sheffield surveyors and / or solicitors who can handle this adeptly (correctly and, hopefully, quickly - cheaply being a bonus)?

 

Secondly, can anyone vouch for the kinds of costs I mention above? Does that sound about right? Finally, has anyone ever taken the plunge to just do this themselves, by putting an offer forward, having it accepted and then, I guess, getting the solicitor involved to dot the Is and cross the Ts.?

 

Just for completeness, I am interested in buying the freehold mainly in an effort to simplify my life - not for any other special reason - I reckon I am better off not having to be concerned about leases and bi-annual payments of £30 (even if it's by standing order)... now seems as good a time as any.

[Jaywalker51 10]

I have some experience of lease extensions for flats but not houses and Jeffrey Shaw will give you the more accurate advice but I suspect you are underestimating the likely cost. Your landlord will, after all, be losing in excess of £6000 in ground rent alone (more if the ground rent is stepped throughout the lease as is usual) in addition to the value of the property when it reverts to him at the end of the lease. You will also be liable for your own survey and legal costs as well as those of the landlord.

 

It may be worth living with a little complication in your life as purchasing the freehold at this stage is unlikely to add to the value of the property.

[chem1st 10]

Do not buy. Seize it legally.

 

Land ownership is unjust.

 

Wars will be fought and ownership shall change hands in the future, such is life and land!. Keep renting it on the common law lease and stay friendly with your neighbours (the commoners). If you intend to seize the land, do so as a group of like minded individuals and take only land you use and occupy.

[FACEBOOK 10]

Assuming that this thread is now back on planet earth.

 

YES, in your situation it makes sense to buy the freehold, £1200 seems rather pricey but if you are happy with that price range go for it.

[Hippogriff 10]

The ground rent isn't stepped and the actual calculations seem to take into account the real value of £60 per year over the 100 years, using tables (geared towards inflation estimates I presume), so it's not seen as simply 100 x £60 = £6,000, but in 2112 the £60 per year is, basically, worth about 10p.

 

BTW, I like ownership of things... buying them preferably... tell me more about seizing stuff!

[Hippogriff 10]

I understand the perspective of complication vs. little rise in value, but any rise would be a bonus. I've no plans to sell and I'm really willing to spend a bit of money to get this simplicity and, I guess, a more complete feeling of ownership.

 

So, I have two pieces of feedback - one saying my estimate is low and one saying that my low estimate sounds pricey. ;-)

[chem1st 10]

The ground rent isn't stepped and the actual calculations seem to take into account the real value of £60 per year over the 100 years, using tables (geared towards inflation estimates I presume), so it's not seen as simply 100 x £60 = £6,000, but in 2112 the £60 per year is, basically, worth about 10p.

 

BTW, I like ownership of things... buying them preferably... tell me more about seizing stuff!

 

6/7s and 12s.

 

Years not bob.

 

Oppose the legal changes to squatting! *(Even if they are only statute and have no authority - so many are blinded by what they are told and 'go with the flow' they swim upstream!)

[rubydazzler 11]

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/Leaseholdproperties/DG_193057

 

It's usually about 10-20 years purchase and you have to pay both parties legal costs. It may cost you money and it may not increase the value of your house, but it's certainly worth buying your freehold if you can. It will make it easier to sell, because very few places other than Sheffield have leasehold properties, other than flats, and it puts out-of-town buyers off.

 

It saves you having to apply for the freeholder's permission to carry out certain works, can relax covenants, and you don't run the risk of falling into the clutches of one of those companies that buy up leases and make money from charging you excessive fees for late ground rent payments, or permission to carry out works to the property.

 

I think it's well worth it, others may feel differently.

[quisquose 10]

I enquired with my landlord (Wentworth Estates) about buying my freehold some years ago, and although the price they came back was reasonable the extra demands were not. As well paying our legal fees and their legal fees, they also expected us to agree to all the other conditions of the leasehold remaining, like not doing anything to the house without their permission and paying a fee for their permission.

 

The only thing I would be saving would be the £9 a year, but we wouldn't really own control of the freehold at all.

 

I don't know how their demands can be legally justified or challenged, but I decided that I couldn't be arsed to find out.

[Hippogriff 10]

quisquose, that situation sounds, simply, odd. I can't get my head around that, as one of the benefits, I had read online, was about you having more control. Did you reach that point informally, without having professionals represent you?

[rubydazzler 11]

quisquose, that situation sounds, simply, odd. I can't get my head around that, as one of the benefits, I had read online, was about you having more control. Did you reach that point informally, without having professionals represent you?

That sounds rather like having fallen into the clutches of one of those companies ... and they want to have their cake and eat it too?

[Hippogriff 10]

P.S. - if I may just add, I know I want to do this, price not being prohibitive. I'm looking more for people who may have experienced this, so I can become more familiar with expected costs, but - also - I am kinda looking for recommendations as to professionals that I might use. I don't think I'd go this alone.