extended lease 4yrs ago .. now offered to purchase freehold

droodleskins

Hi,

I am the owner of a leasehold flat which consists of 2 other flats so 3 in total worth approx 250k each today .. when we moved in 4 years ago there was an option to either buy the lease for around 6k or extend for the same price we extended as not everyone could afford to buy freehold

Now the landlord who is a private owner who used to live at the property (but hasn't for some time) has expressed a wish to all the owners to sell us the freehold, she has also said that she will sell at the same price as the estimates she got back in 2009 when we moved in - ie 6k.

The person in flat 1 wants to buy the freehold (been in the property the longest 15yrs+) Also flat 2 now wants to buy the freehold But where does that leave us with a longer lease than the other two ?

Now this is where i don't understand how it works .. if when we moved in the freehold could be bought for same price as the lease extension and we now wanted to buy the freehold would we now have to pay another £6K for the freehold .. or would it be proportionate as we have already paid £6k 4 years ago ?

cheers.

thelem

As you found out four years ago, the other flats can't buy the freehold unless you all want to buy the freehold*

Yes, the freehold will be worth less because you've extended the lease, but it'll be hard for anyone on here to put a value on what it is worth, especially as you've not included figures such as length of lease and annual charges.

(*minor exception: unless they want to become your freeholder and the current freeholder agrees).

droodleskins

ok so we paid 6k - 4 years ago to extend to 99 yrs. The cost for the others to buy the freehold is now 6k each as well, they currently have 75yrs left. annual charges are 50 ground rent and approx 400 maintenance.

tim123456789

thelem wrote: »

As you found out four years ago, the other flats can't buy the freehold unless you all want to buy the freehold*

Yes they can

they jointly pay for his share and continue to charge him ground rent.

tim

martinsurrey

That seems like a huge amount for a freehold with only £50 ground rent, 120X multiple...

What are the terms of increases in ground rent per your lease?

FYI I’ve seen New build freeholds sell for 22 times the ground rent, and they had 15 year doubling.

tim123456789

martinsurrey wrote: »

That seems like a huge amount for a freehold with only £50 ground rent, 120X multiple...

What are the terms of increases in ground rent per your lease?

FYI I’ve seen New build freeholds sell for 22 times the ground rent, and they had 15 year doubling.

The reversion value and marriage value on a 250K property is going to start at 5K and go up exponentially the shorter the lease gets.