Buy Your Freehold - guide discussion

blinko

Hi guys just wanted to ask your thoughts

A friend has a 2 bed flat Victorian conversion, there are two flats in total

• Ground floor 1 bed
• 1st floor 2 bed

Ground rent is £50 per year and £0 service charge, (the lease is worded that both lease holders are responsible for structural repairs), there's currently 87 years left on the lease.

Do you reckon its worth to ask to buy the freehold (other flat not involved) informally or better just to go for the extension with peppercorn (flat value approx £210k)

thanks

eddddy

blinko said

Do you reckon its worth to ask to buy the freehold (other flat not involved) informally or better just to go for the extension with peppercorn (flat value approx £210k)

When you say "other flat not involved" do you mean keep it secret from the other flat owner, or that the other flat owner isn't interested in participating?

Taking a step back, presumably you realise that "buying the freehold" means buying the freehold of the whole building which contains 2 flats.

So your friend would become freeholder (aka landlord) of the leaseholder (aka tenant) in the other flat.

So your friend needs to read both leases to find out what the rights and responsibilities of the freeholder/landlord are.

But TBH, based on what you've said, I suspect that the freeholder/landlord might have very few rights and responsibilities.

Does the building have any development potential? e.g. scope for converting the loft, or for building an extension? If so, buying the freehold might have some profit potential.

blinko

https://forums.moneysavingexpert.com/discussion/comment/81920341#Comment_81920341

They have been trying to contact the other flat but they haven't been replying, the other falt is being let out and its believed the owner lives abroad and its done via an agency , so there is some way of contacting should there be an upmost emergency (I ssume) probably with the tenants but the efforts haven't got any reply so far ,

the freeolder should have such contact details but as touched on , it's a shame as it would make sense to share the costs

Extension wise not really, it's kind of already extended but maybe but likely downstairs would benefit from this (1st floor flat is trying to buy freehold) there is potential for a L shaped roof extension (roof is quite big) and it has been designated as habitable space (2nd bedroom), there is currently , so they could make it L shape dormer but it's already one bedroom

eddddy

blinko said

They have been trying to contact the other flat but they haven't been replying, the other falt is being let out and its believed the owner lives abroad and its done via an agency , so there is some way of contacting should there be an upmost emergency (I ssume) probably with the tenants but the efforts haven't got any reply so far ,

So as you suggest, the only option is to approach the freeholder to see if they'll sell the freehold informally.

They might ask for a stupidly high price, in which case, your friend can try negotiating.

In simplified terms, the price your friend should aim to pay is roughly…

(The cost of their own lease extension) + (the cost of the other flat's lease extension) + (a bit on top)

If there is development potential, the freeholder might want more money on top of that.

blinko

https://forums.moneysavingexpert.com/discussion/comment/81920539#Comment_81920539

Many thanks, they have approached informally lets see what comes back.

another question on the car park space (1/18 spaces is tied to the flat lease), it's not being used by the leaseholder , ground rent is £10pa which isnt collected by the freeholder (i don't think he wants much to do with it) 88 years remain

it old my mate its probably wise to extend it just to prevent issues with the bank, but how on earth would that be valued ?

The only way i could see is what's a resi permit for the year approx £50 p.a from the council BUT that isn't income due to freeholder simply a like for like OR are car parks more of a formality to extend. Although there is a licence to asign in the car park lease £750