Buying the Leasehold for Property

mark8par

We currently live in a property that is leasehold & we have had an offer to buy this but it seems very expensive.

Lease has currently about 995 years to run and we pay £150 per year. the cost to buy it is about £7400.
My question is this, is it worth it and what benefit is there to buying it. Also how do i know the figure they have come up with is correct? is there a way to calculate this (simple way) and can i negotiate.

timmyt

with that length of lease you are basically freehold now anyway.

what lease payments do you make - which you would save if you bought the freehold?

mark8par

Hi,

We pay £150 per year but this will be reviewed in 25 years. Also what happens if you do not notify of any changes to the property.
The company we bought the house from went bust and in that time we had a conservatory built but did not know who to contact. They then contacted us after we built it to demand money for years previous that they had not received.

G_M

mark8par wrote: »

We currently live in a property that is leasehold & we have had an offer to buy this but it seems very expensive.

Lease has currently about 995 years to run and we pay £150 per year. the cost to buy it is about £7400.
My question is this, is it worth it and what benefit is there to buying it. Also how do i know the figure they have come up with is correct? is there a way to calculate this (simple way) and can i negotiate.

I'm assuming you've been offered the freehold, not to purchase a lease which you already have?

The only advantages to owning the freehold are
a) if the lease is very short (which it isn't) or
b) if you might want to make structural changes/extensions to the building which the freeholder could deny or charge exhorbbitant amounts for.

Otherwise you're just paying out to get very little advantage.

mark8par

What can i do if the price is not fair do i have any rights or is it just a case of the seller can charge what they want.

I have tried to run through one of the calculators on an advice website but its very complicated. Is there a way to work out an rough estimate.

newbie1184

Going back a good few years my parents were in a similar situation aswell with a number of others in the same road. A number of people took the company to court because they were asking silly money for the purchase of their lease.
In the end, the company was forced to reduce the lease to a more affordable price and most took up the offers.

I'm not too sure how it works now but i definately seek some more advice on this matter. Plus maybe ask around to see if others are having the same problem?

Plus you may discourage potential buyers if you have any plans to move in the future. I tended to avoid leasehold properties when looking a year ago but then i bought one in the end as the owner offered to buy the lease! So maybe not that much of a big deal either.

G_M

newbie1184 wrote: »

Going back a good few years my parents were in a similar situation aswell with a number of others in the same road. A number of people took the company to court because they were asking silly money for the purchase of their lease. (freehold?)
In the end, the company was forced to reduce the leasefreehold? to a more affordable price and most took up the offers.

I'm not too sure how it works now but i definately seek some more advice on this matter. Plus maybe ask around to see if others are having the same problem?

Plus you may discourage potential buyers if you have any plans to move in the future. I tended to avoid leasehold properties when looking a year ago but then i bought one in the end as the owner offered to buy the lease!(freehold?) So maybe not that much of a big deal either.

Pedantic? Maybe. But best to understand these things.

Blacksheep1979

http://en.wikipedia.org/wiki/Discounted_Cash_Flow - there you go, opportunity to learn something new . If you don't think the price is fair you can get a surveyor to price it for you and if you still believe it's overvalued go to the Leasehold Valuation Tribunal and get them to sort it all out.

satchmeister

mark8par wrote: »

We currently live in a property that is leasehold & we have had an offer to buy this but it seems very expensive.

Lease has currently about 995 years to run and we pay £150 per year. the cost to buy it is about £7400.
My question is this, is it worth it and what benefit is there to buying it. Also how do i know the figure they have come up with is correct? is there a way to calculate this (simple way) and can i negotiate.

Google 'Lease Valuation' or 'Lease valuation tribunal' they have a rough calculator where you enter number of years, property value, ground rent etc. More useful for flats when leases are 80 or 90 years and the 'marriage value' comes into play. There are also specialist solicitors who deal with this including negotiations with the landlord.

Richard_Webster

Google 'Lease Valuation' or 'Lease valuation tribunal' they have a rough calculator where you enter number of years, property value, ground rent etc. More useful for flats when leases are 80 or 90 years and the 'marriage value' comes into play. There are also specialist solicitors who deal with this including negotiations with the landlord.

You are not buying the freehold of a block of flats- the calculations are different for buying the freehold of a house - so make sure you are using the right calculator.