Cost to acquire loft from neighbour (co-freeholder)

ddeblasio

Hello,

I have a question related to the value of a loft space and the cost to acquire it from our neighbour who owns the freehold with us.
We live on the first floor of a cottage, which has a loft space just above our flat: this area is only accessible from our flat but it is not demised to either of the flats.
Instead of buying a new property (we have a little one and are in need of more space but want to stay in Clapham) we thought of extending the flat by acquiring the loft and we were wondering what that space would be worth as we would have to buy it from our neighbour and change the lease before starting the works. Our neighbour has nothing against this and actually nearly 4 years ago when we bought the flat she offered to sell it for £2,000 provided that we agreed to be increase our share of the property from 50% to 60% (therefore having to pay a higher share of any the maintenance costs) and also responsible for the roof both internally and externally (it is a cottage from 1870 in a conservation area). Now what you think would be a reasonable asking price given the fact that prices of properties have started going up again?

Any help/suggestions would be very appreciated!

Many thanks in advance,

Daniele
Clapham SW11

scottishblondie

I have no idea what you should offer, but before you do anything have you spoken to your local conservation officer and planning office? You need to check that there is some probability of being allowed to convert the loft before doing anything else.

Fire_Fox

Nobody can tell you what it is worth, depends on the square footage you get, what it costs to convert, prices in the local area, how well duplex apartments with higher than average maintenance costs sell. Can you definitely get planning permission, are you permitted to install roof lights in a conservation area, can you meet building regs to make that loft space into a legally habitable space? You will also need to factor in the legal costs of varying BOTH long leases, you will likely need to involve one or both lenders in this.

IMO the first thing to do is speak to the council, then get a good builder to quote, then research the local property market, then get your calculator out.

ddeblasio

Thanks for the replies! We have already been confirmed the extension works we want to carry out are allowed: my wife is an architect and has already visited the local planning office. We are now in the process of getting builders to visit the property and give us an estimate, but would hate to see our plans ruined should the price for acquiring the loft space skyrocket to £20K or more...

propertyman

Erm due respect to post 3, but a qualified valuer can tell you what it's worth and in cost terms.

The valution is based on the increase in value of the flat you have and the flat you will have, post conversion. From that you deduct the cost of conversion.

So lets say its £100k increase in value less say £50k to convert, and therefore the premium is £50k due to the freeholder. Without taking into consideration tax that the freeholder ( you and GndFF) have to pay on that, it means in essense £25 k from you to the GndFF.

There are other factors to take into consideration from the hope value and price inflation over time, that the GndFF can often hold you ransom on consent, and that it puts off the day that you would have had to pay for a new roof, and noise and disruption, all of which can be negotiated from this base, as well as whether you do it properly or GnFF finds a bag of £25K in used fivers on the mat. You know which one HMRC will tell you to do...

Bear in mind that you pay for all the legal and professional costs for you and the freeholder
- as you should ideally grant a supplemental lease for the loft, or grant a new one for the whole,
-and take into account and adjustment of any apportionment for costs re services and insurance bearing in mind your flat is now a lot bigger,
-as well the lease wording as who is responsible for things like dormers in the roof and services if the work means that who does what is changed as a result of the change in layout
- and the building is revalued for insurance purposes ( nowt to do the sale value of the flats) by a qualified valuer

Allow £400 for the valuation from a local chartered surveyor

Hope that helps

Fire_Fox

ddeblasio wrote: »

Thanks for the replies! We have already been confirmed the extension works we want to carry out are allowed: my wife is an architect and has already visited the local planning office. We are now in the process of getting builders to visit the property and give us an estimate, but would hate to see our plans ruined should the price for acquiring the loft space skyrocket to £20K or more...

Ask the neighbour if the £2K offer plus varying the leases/ maintenance arrangements still stands and work from there.

propertyman

ddeblasio wrote: »

. We are now in the process of getting builders to visit the property and give us an estimate, but would hate to see our plans ruined should the price for acquiring the loft space skyrocket to £20K or more...

Well if you agree a price* you can always draw up a contract or at worst let them put a charge on the flat to pay £x when it's sold up.

* Money is one thing but you can say that you will instead overhaul the roof or repaint the outside retarmac the drive or similar, which are not simply about cost but the uncertainty of when the cost will be there.

If you take that uncertainty away, thats often worth more than just £££s.