Buy Your Freehold - guide discussion

Joanthebone

As the management company are happy for you to buy your share of the freehold, why not just do it, then you sell your flat with a share of freehold. 

Slithery

Wranglehart said:

Hi all, quick question with hopefully a simple answer:

We are considering selling our flat and it has become apparent that our lease length of 85 years may become a problem for would be buyers. We are the only flat in the block who do not own a share of the freehold, the management company having bought in in 2011 and shared out among the 9 flats for 999 years.

What we are interested in is starting the process off (the management company seem happy for us to buy in) and adding the buyer of our flat in name on the share of the freehold. This way we’re hoping the cost of buying in won’t put off potential buyers as they’ll have the share of the freehold at the time of completion on the sale.

Does anyone know or have any experience of whether this would be possible, easy, difficult etc?

Thanks!
C

Buying a share of the freehold and extending your lease are two different things. Just buying into the freehold will still leave you with an 85 year lease.

lisarc26

Hello. I'm new to the forum and looking for some guidance/advice about applying to buy the freehold of my building - with a missing freeholder situation! (Nightmare!!! Hahaha...) I own a leasehold flat in a house conversion. There are only 2 flats in the building. I have owned the flat for 16 years and the freeholder has been missing the whole time. I had a statutory lease extension granted  in 2014 and now want to pursue buying the freehold as the other leaseholder does very little to maintain the building, and I'm worried about the viability of selling my flat with a missing freeholder. I'd like to get some pointers on how I can carry out the process as cost effectively as possible! Any ideas anyone?? Many thanks in advance! Lisa 

Emiliesims

Hello all,
Brilliant thread. I am about to purchase the ground floor flat of a Victorian terrace in London, currently split into two flats. The current lease is a dismal 51 years with £20 PA ground rent. The upstairs leaseholder extended his lease in recent years and has 145 years now remaining. As I am planning on making renovations, I am interested in purchasing the freehold along with the leaseholder upstairs (he has agreed, as long as I pay the lion's share, which is fair enough). My question is: which is the best order to go about things? Pay for a lease extension for my property first and then apply for the freehold? Or pay for the freehold, and then extend my own lease?
Thanks so much!

Joanthebone

lisarc26 said:

Hello. I'm new to the forum and looking for some guidance/advice about applying to buy the freehold of my building - with a missing freeholder situation! (Nightmare!!! Hahaha...) I own a leasehold flat in a house conversion. There are only 2 flats in the building. I have owned the flat for 16 years and the freeholder has been missing the whole time. I had a statutory lease extension granted  in 2014 and now want to pursue buying the freehold as the other leaseholder does very little to maintain the building, and I'm worried about the viability of selling my flat with a missing freeholder. I'd like to get some pointers on how I can carry out the process as cost effectively as possible! Any ideas anyone?? Many thanks in advance! Lisa 

What does your lease say about maintenance?   Did your solicitor give any advice regarding the missing freeholder when you bought your flat?     I suggest you get help from  https://www.lease-advice.org/

Joanthebone

Emiliesims said:

Hello all,
Brilliant thread. I am about to purchase the ground floor flat of a Victorian terrace in London, currently split into two flats. The current lease is a dismal 51 years with £20 PA ground rent. The upstairs leaseholder extended his lease in recent years and has 145 years now remaining. As I am planning on making renovations, I am interested in purchasing the freehold along with the leaseholder upstairs (he has agreed, as long as I pay the lion's share, which is fair enough). My question is: which is the best order to go about things? Pay for a lease extension for my property first and then apply for the freehold? Or pay for the freehold, and then extend my own lease?
Thanks so much!

I think you should contact    https://www.lease-advice.org/    I don't think you can extend your lease until you have owned the property for two years....things might have changed though,  as far as I can remember,  usually a seller initiates the lease extension process then the buyer can complete it at the same time as the purchase.   Is the freehold for sale?

eddddy

Emiliesims said:

Hello all,
Brilliant thread. I am about to purchase the ground floor flat of a Victorian terrace in London, currently split into two flats. The current lease is a dismal 51 years with £20 PA ground rent. The upstairs leaseholder extended his lease in recent years and has 145 years now remaining. As I am planning on making renovations, I am interested in purchasing the freehold along with the leaseholder upstairs (he has agreed, as long as I pay the lion's share, which is fair enough). My question is: which is the best order to go about things? Pay for a lease extension for my property first and then apply for the freehold? Or pay for the freehold, and then extend my own lease?
Thanks so much!

Are you a cash buyer? It might be very difficult to get a mortgage on a flat with a 51 year lease. 

Assuming you're a cash buyer, it will probably work out cheaper and easier to...
1) buy the leasehold flat
2) jointly buy the freehold from the freeholder - and instruct your solicitor to vary both leases to make them 999 years long at zero ground rent - at the same time.

The complicated bit might be agreeing how the purchase price of the freehold is split between you and the upstairs leaseholder.


But if you need a mortgage, it will be much more difficult. One way or another, the lease will probably need to have been extended on or before the completion date. 

Buying the flat and buying the freehold at the same time in order to extend the lease might need cooperation and goodwill between 4 different parties - you, the seller, the upstairs leaseholder, and the freeholder. (I suspect that will be very difficult to achieve.)

.... unless the seller is prepared to buy the freehold and get the lease varied, before selling to you.

Firsttomeseller

It’s a great article. It mainly written for flats. I wondered if there could be more tailored advise for houses? And am I right in thinking if it’s a £250,000 house to buy the leasehold you have to pay the stamp duty so will be another £2500?? 

For context I am buying a home I wanted a freehold house so the current owner said they would buy the lease. It seems to be taking a while (5 months already) so I am thinking of buying it as a leasehold.. 
Thanks

eddddy

Firsttomeseller said:

For context I am buying a home I wanted a freehold house so the current owner said they would buy the lease. It seems to be taking a while (5 months already) so I am thinking of buying it as a leasehold.. 
Thanks

I'm guessing you mean "the current owner said they would buy the freehold".

In simple terms - there are 2 ways of doing this:

1. By informal negotiation with the freeholder
2. By following a statutory process called 'leasehold enfranchisement' - essentially the law gives leaseholders the right to "compulsorily purchase" the freehold, subject to conditions 

This article briefly explains the 2 options : https://www.lease-advice.org/faq/i-own-a-leasehold-house-how-do-i-buy-the-freehold/

This article describes the statutory process in more detail - i.e. option 2 :  https://www.lease-advice.org/advice-guide/houses-qualification-valuation/


Do you know which option your seller is following?

Firsttomeseller

Thanks yes I meant the current owner is buying the freehold.

They have approached the freeholder informally. 

Does this mean they don’t have to pay the stamp duty?