leasehold to freehold

shazkhan111

I bought a new build property about a year ago, i have now been offered the opportunity to buy the freehold.

I needed to know are there any advantages to doing this, the property is in a block with another 111 flats. I pay a service charge at the moment, would this be affected in any way?

Depending upon how many residents agree to buy the cost can be anything from £4000 to £9000.

Is it worth doing?

KellsBells

Hi, you say you pay a service charge at the moment, and will it be affected...If you buy the Freehold you will not have to pay this anymore. It may be worth doing - can I suggest taking your solicitors advice on this? ...

shazkhan111

thanks kellsbells

neverdespairgirl

KellsBells wrote: »

Hi, you say you pay a service charge at the moment, and will it be affected...If you buy the Freehold you will not have to pay this anymore. It may be worth doing - can I suggest taking your solicitors advice on this? ...

You do still have to pay service charges - they go for upkeep, cleaning, repairs, etc. It's ground rent that is affected.

truman_sparks

Also worth looking into the price, you have a right to buy the freehold after 2 years, there is formular to give a correct price. So you may be paying over the odds now when you could get it cheaper later. my advise, take advise on a fair price and buy now if it is or wait and exercise your right to buy later. if the price offered then is unreasonable it will go to dispute and the formular will be applied.

hth

TS

lil_miss_17

Freehold properties are aways more attractive to potential buyers than leasehold.

Richard_Webster

You can't buy the freehold of just your flat - you with others will have shares in a company that will be set up to buy the freehold.

If there are only 4 flats in the building then you could own the freehold literally jointly with the 4 flat owners' name son the freehold title - but this brings other complication that I won't go into now!

You will still have to pay service charge although you will have a say in the fixing of the amount. Usually you no longer pay ground rent.

This can only go ahead if enough people want to join in and regrettably it is often the case that enough people aren't prepared to find the money.

The shorter your lease gets the more important it is to be part of a collective acquisition of the freehold.

If you do buy into it then don't ever refer to your flat as being "freehold". Your flat remains leasehold and if you sell or remortgage that is what you are selling and that is what will be mortgaged. Think about it - if the freehold is owned by a company of which you are a member - the company and its other members certainly won't want your mortgage on the freehold title! Ownership of a "share" in the freehold is a selling point, and you will transfer the share in the company to your buyer, but can cause confusion in some quarters

Mention of freehold in the context of a flat, gets mortgage brokers and lenders confused and because they won't generally lend on a pure freehold flat (where you own the freehold of just your flat and other people have separate freehold flats in the same building - rare but possible - especially in Scarborough) you can have trouble getting a mortgage on a "shared freehold". When getting a mortgage on such a flat you tell the lender it is leasehold - which it is - you just happen to have a share in the company that owns the freehold!