Should we buy the leasehold before we sell?

lisa76

Yes it is a leasehold house hazyjo. We're not in an exempt area as far as I know (Rhondda Cynon Taff, South Wales) - will check that out.

I'm wondering whether to say the buying price has to be £124950 and we buy the freehold but the new buyer gives us the £4k to cover that - is that even legal??? Because the way I read it the new buyer won't be able to buy the freehold until they've lived there for two years but they won't get a mortgage unless we buy the freehold.

Bloomin houses!

propertyman

So as a householder you have a statutory right to purchase the freehold.

http://www.lease-advice.org/publications/documents/document.asp?item=15

Your valuation is therefore perhaps one for the freehold, and the reference to leasehold is a common and incorrect misapplication of the American term " buy the lease".

lisa76

Yes Propertyman, I confused myself with the terminology and the quote of £3500 is to buy the freehold. As he's had the property for 2 years he's allowed to buy the freehold, and we're now wondering if we can do a cash transaction from a potential buyer to cover the cost of the freehold so that it's not added to the selling price of the house and therefore incur stamp duty.

Richard_Webster

Although there is a 2 year qualification rule, some freeholders may be prepared to sell the freehold directly to the buyer and therefore they would not be linked transactions - and so SDLT would not be payable - different parties who are not "connected".

lisa76

Thank you Richard, I will contact the Landlord and ask if he'll consider doing this.