Selling a share of a freehold

Beetee73

Hi,
We own a ground floor flat with the freehold for the building including the flat above us. The owner of the upstairs flat has approached us asking to buy a share of the freehold. He has made an offer (£12,000) but I have no idea if this offer is reasonable and, if not, how we could we find out how much we should be asking for. The lease was originally for 99 years but now has only 50 remaining which I understand may give us some leverage in negotiating.
Any help/advice most appreciated.
Thanks

nollag2006

You need to get professional advice on this.

See here:
http://www.lease-advice.org/information/faqs/faq.asp?item=190

propertyman

Beetee73 wrote: »

Hi,
We own a ground floor flat with the freehold for the building including the flat above us. The owner of the upstairs flat has approached us asking to buy a share of the freehold. He has made an offer (£12,000) but I have no idea if this offer is reasonable and, if not, how we could we find out how much we should be asking for. The lease was originally for 99 years but now has only 50 remaining which I understand may give us some leverage in negotiating.
Any help/advice most appreciated.
Thanks

Ok this first thing is that if your lease is only 50 years left to run, it is worth quite a bit of a money to a freeholder. Any leaseholder who want so to extend it to say 99 years will have to pay a substantial amount to the freeholder.

The reason for this is that when leases get to 90 year left they become order to get financing on, and start to fall in value. At 80 years the way in which that extension is valued changes and fewer lenders are prepared to lend, and the value plummets.

I would suggest that you see your solicitor and as you are the sole owner of the freehold, grant yourself and extension to the lease to 999 years and a peppercorn ground rent ( ie a nil rent).

Most of the value of the freehold is in fact the right to grant those extensions, so granting yourself an extension protects your home for the future. If you sold to the neighbour then he could hold you to ransom when you come to sell in the future or it is inherited.

No if there are 3 flats or more you cannot sell the freehold or part of it without first offering it to the other leaseholders, known as the right to first refusal.

So in short I would suggest you find a local chartered valuation surveyor who deals with lease extensions via RICS.org, and no your average local estate agent cannot help as they are not qualified to .