Should i purchase freehold

If you own a house built in the 's or 's where you pay a ground rent then you need to read this! However, whenever you want to change a window to a patio door or build a small extension or place solar panels on your roof, you need the consent of the Freeholder. They not only charge several hundred pounds for this consent, they often increase the ground rent significantly.

In addition, when they try and sell their homes, they find out that they may have a big problem. Mortgage companies will not lend on properties with less than 60 years left on the Lease. Make sure you stay up to date with our video content as it's published.

By subscribing you will be notified as soon as new videos are released. By law, they must offer all leaseholders first refusal to buy the freehold if they wish to sell it. By law, at least half of the leaseholders in the building must come together to purchase the freehold. At the end of the process, you and the other occupiers would together own the freehold to the building.

This is often done by forming a limited company that would be owned and controlled by the flat owners. Separately each occupier would still have a long lease but from the new entity that owns the freehold, which you and your neighbours control. Once you jointly own the freehold, you can collectively set ground rents, shop around for the best insurance and generally be in control of your own destiny.

To be eligible to buy a Freehold, the current lease must not be a commercial lease and have a duration of at least 21 years. Should the Leaseholder and property meet the eligibility criteria, the process of valuing the Freehold would need to be undertaken, known as Collective Enfranchisement or Freehold Enfranchisement. The act aims to ensure a fair trade of the lease from the Freeholder to the Leaseholder however the rules of valuing a Freehold have evolved throughout various amendments made to the Act and is fairly complex to undertake without the help of professional solicitors and surveyors.

As you can imagine, the valuation process is rather complicated and therefore often requires the input of professionals, however, there are freehold cost calculators available online which may provide an estimate of the costs involved with purchasing a specific Freehold.

Mortgage lenders ideally like there to be at least 50 years remaining on a lease following the end of the mortgage term. For example, if a chosen mortgage term is 30 years, the lender would often require a minimum of 80 years left on a lease. Lease lengths may be extended by agreement with the Freeholder and will often involve additional costs plus legal fees. There are benefits to owning the Freehold of a property, including control of the maintenance costs, however, the process can be rather complicated from valuation through to any negotiations between the Freeholder and Leaseholder, and therefore it is highly recommended that advice and support are sought from professionals throughout the process.

Call us today on or feel free to contact us. One of our advisors will be happy to talk through all of your options with you. Whatever your mortgage requirements a member of our experienced team are on hand to advise you on the best deals. WA12 9SH. Calls may be recorded for training and monitoring.