Freehold Purchase

rawson

Hi There,


I recently made an offer to my Lessor to purchase the feehold of my house for £1800, however they have since responded that they are not interested in selling at this time!?!?


I'm wondering if anyone on here is able to tell me if our offer was a fair one or unreasonable, as I based it on the price one of my neighbours paid in a identical property a few years ago?


Basically we are on a 999year lease starting from the 1st June 2003, the purchase price in 2003 was £230,000 with a "declared value" of £250,000. The property is worth approximately £215,000 in today's market.


The rental payment structure is as follows;


£80 per annum for the first 25 years
£140 per annum for the second 25 years
£200 per annum for the third 25 years
£260 per annum for the forth 25 years
£320 per annum thereafter.


The property is based in North Nottinghamshire.


Or, if no one is able to calculate this on here, does anyone know of a reasonable priced solicitor would be able to produce an accurate cost?


I'm happy to take the Lessor to court to get a fair price, but I do not know what a fair price is due to the increasing scale structure of the rental payments.


Any help is VERY much appreciated :-)

eddddy

It's typically specialist RICS surveyors who value freeholds, not solicitors.

This surveyors firm have an online freehold purchase price calculator - but it only seems to support one ground rent review, so it may not be completely accurate for you :
http://www.m-js.co.uk/calculator

(But I don't know this firm and I can't vouch for the accuracy of their calculator.)

Here's the background on valuation: http://www.lease-advice.org/advice-guide/houses-qualification-and-valuation/

daveyjp

The calculation is relatively straightforward, its a net present value. However like all valuations its the data going into the calculation which makes the difference. A discount rate is required and this can make a huge difference to the final figure.

AdrianC

rawson wrote: »

but I do not know what a fair price is due to the increasing scale structure of the rental payments.

I seem to recall from other threads that 40x ground rent is the usual for new-build developers selling freeholds.

So, from that, you have 12yrs of £80 plus 25yrs of £140, plus 3yrs of £200 = £960 + £3500 + £600 = £5,060.

Bit different to £1,800.

Is it worth it?