Leasehold to Freehold

JCRWells

Hi folks,

Has anyone had any experience of purchasing the freehold of a property that was previously leasehold?
This property is currently owned by a housing association and the previous tenants were there on a shared ownership basis. I only found this out after the estate agent told me the property was freehold and having my offer accepted, paperwork started to come through saying leasehold so i pulled out.
Basically how easy is the process of a leasehold changing to freehold? I'm a first time buyer and I really like this property and would like to re-start ngotiations, i'm a little put off by the estate agents not being helpful on the matter and not knowing anyone thats been in a similar situation.
Any advice?

Thanks

Jon

poppysarah

You've got to live there 2 years I think before you can apply to buy it.
Your solicitor should have been able to answer your questions on it.

JCRWells

On further pushing they've said that on completion of purchase i will own the freehold but its current status is leasehold?

poppysarah

Not a clue how that'll work. Unless they're buying the leasehold for you.

You need a solicitor to explain it all to you ...
There is a leasehold forum elsewhere that might help

JCRWells

I didn't want to start paying out for things like solicitors if I wasn't going to to through with the purchase. I might leave it and look for something more simple.

KiKi

Yes, I purchased the freehold to my property which was leasehold when I bought it. I only agreed to buy the property once I had it in writing that the freehold would be sold to me on completion.

It's no big deal (unless there are issues that come out during the purchase!).

I suggest that you a) get it in writing, pref within the contract, that the freehold will be purchased by you upon completion and b) make sure that it's reflected in the house purchase price.

It cost me something like £300+VAT of solicitor's time to do the transfer into my name, plus the cost of the freehold which was £2K (or thereabouts), plus £300 or so of the seller's solicitor's time.

Find out what it will cost you in total to buy the freehold - and bear in mind that usually the purchaser pays for the seller's solicitor's fees, too. If I were you, I'd reduce your offer on the house by that much so that you're not out of pocket.

It's no hassle - for you it's a piece of paperwork that has to be filled in, witnessed, and sent back to your solicitor. Everything else is handled by them. Just get it in writing, whatever you do! I strongly recommend that you instruct your solicitor to write into the contract that the freehold *will* be sold to you at x price so that when you exchange they can't change their minds about selling - or worse, increase the price of the freehold from £2K to £20K and then you're committed to buying it with money you may not have.

I hope that helps you.

KiKi

Doozergirl

Is it a flat or a house?

It's essential for a flat to have a lease, even if it has a share of freehold as well. It's not as simple as 'freehold' and 'leasehold' - it's also not a bad thing told have a leasehold property so why drop it like a hot potato without the full story? This is exactly what you solicitor is for.

I need to know what kind of property it is in order to give the right information but it isn't hard to buy freehold. If it is a house and they are offering it to you freehold then they would change it for you as it's almost certain that the same people selling you the flat are also the present freeholders. If it was SO previously it would have had to be registered as leasehold to accommodate that. Anything from the land registry is going to show leasehold as they won't have re-registered it yet.

You simply ask through your solicitor that as a condition of the sale that the property is sold with the freehold. If it's a flat you're never going to get away from a lease - they don't come any other way.

Richard_Webster

This property is currently owned by a housing association and the previous tenants were there on a shared ownership basis.

That's the clue. If it is a flat you are not going to get the freehold of just your flat and if you did it would instantly be unmortgageable, so don't go there! What follows assumes its a house.

Seller is presumably the person who had the 50% (or whatever percentage) share in the property. In order to transfer the freehold to you he would have to use your money to instantly buy in the remaining percentage from the Housing Association and then transfer the freehold to you. This is not impossible but there are traps.

A lot of modern shared ownership leases have wording in them designed to make it difficult for the person with shared ownership lease to buy in the freehold and immediately sell it on - they want to keep the properties as far as they can for those who can only afford shared ownership. So they say that the person who buys in the freehold has to keep it for at least 3 months. So he can't use your money to do it and would have to raise a mortgage or whatever to do so.

This all gets very technical, but you can get hold of the Housing Association to ask them what the seller has to do. If they say he has to buy it and hold it for 3 months before selling the freehold then the transaction is going nowhere and he should be offering it as shared ownership to someone on the HA waiting list and not on the open market.

LOZ007

Dont touch leasehold with a bargpole!

Doozergirl

LOZ007 wrote: »

Dont touch leasehold with a bargpole!

Tosh.

Don't listen to people who can't be bothered to explain themselves!

simple2rent

Normally it is a good idea to buy the freehold. The value of the freehold can be estimated form the number of years lease remaining and the annual ground rent .... a surveyor can provide a market value estimate for you.

Benefits of owning the freehold include ...

no ground rent
enhanced capital value (no lease to expire)
control of management costs

This last point cannot be emphasised enough. The freeholders control the management company that maintains the property ... this should mean less "excessive" repair costs as you can check all quotes before any major works is carried out and instruct the management company accordingly.