Buying a freehold

jessicacox3

I wonder if anyone can help please ...

I have just been offered to by the freehold for my one bedroomed flat for £4,000 plus their legal costs. I currently pay £50 per year ground rent and the lease has 87 years left - does this seem like a reasonable price? Is a freehold even worth buying?

Also, it is a house split into two and the lady upstairs can not afford to purchase hers - could I just buy mine, or can it not be split?

Any help would be really appreciated as is so complicated that feel like head is going to explode! :eek:

Richard_Webster

Also, it is a house split into two and the lady upstairs can not afford to purchase hers - could I just buy mine

Yes you could in theory - it is like throwing cash on a fire:

1. You pay for the freehold
2. Your flat goes down in value by about 30% because it it becomes unmortgageable.
3. You have the legal costs etc and hassle of reuniting the two flat freeholds.

With an obscure exception which I won't go into now, you have to keep the whole building in one freehold, otherwise the flats in it become effectively unmortgageable.

It will depend on the value of the flats but if each of them is worth about £100K then the figure doesn't seem too bad. You will be able to collect the £50 ground rent and in years to come (say 5-15 years) you will be able to recoup your investment by charging the other flat owner for a lease extension.

In the meantime you will have to comply with the landlord's covenants about maintenance and repairs and usually you will have to arrange the insurance of the building and charge a proportion of the cost of this to the other flat owner.

So the benefits of buying the freehold in your case are not that great - but the main reason for doing so may be that if you or the two flat owners together don't buy it, the freeholder may sell the freehold to some horrible rip off property company that will make your lives hell.