Buying freehold - questions of cost and oppurtunity

Simon74

Hi forum,


I’m living in a leasehold flat which is part of terraced conversion of 3 flats. I’ve been in discussion with the other leaseholders and we’ve agreed to take the first steps in collective enfranchisement. The main reasons for doing this is the costly insurance bills, future improvements we want to carry out and an ineffective landlord. We have 97 years on the lease and ground rent £50, no service charge.


The landlord/freeholder is Pier Management/Regis. Does anyone have experience buying the freehold from them? Can some freeholders make it a difficult and potentially costly process. The other leaseholders are only likely to go ahead with this if they can be certain of the costs. I’m sure this is same as in any freehold purchase but can the freeholder play hardball?


We also have individual reasons for buying the freehold; the upstairs leaseholder would like to purchase the loft to add a bedroom to the flat and I would like to extend my ground flat into the (private) garden. If we own the freehold it seems there will be the big benefit of these works being possible with the mutually agreed re-writing of the lease, rather than costly negotiations with the freeholder, or them refusing if structural modifications are proposed. Is this how it could potentially work?


Any tips would be much appreciated.

princeofpounds

Hi. Freeholder can make silly demands, and stall to a certain degree. But ultimately you can fall back on the LVT process which, whilst it might take a while, will give you a sensible price. You can't be totally certain of costs in advance (specifically the valiation of the freehold) but you can be comfortable it will be a reasonable process and with some research you should know the ballpark.

As for the extension/loft... Yes you collectively, as the freeholder, could agree the right to extend for free. However, the third (middle?) occupant would reasonably expect some compensation given the freehold they co-own would be giving value to the leaseholds they don't own.