Freehold (Again)

nazarineo

Hi everyone
I purchased a semi-detached house in august of 2015 , it was a new build worth 154k , the ground rent is £100
I was originally told i would be able to buy the freehold for £1000
But have now been offered to buy the freehold for 3.5k plus obviously legal expenses
My question would be ,is there a cap on how much the ground rent can increase ? and would that pass to the new company who aquired the freehold should i decline ? or could they just make a fresh start and charge what they wished
I very much doubt it would stay at £100 as that would take 35 years to come into profit !
I could in all probability come up with the fee myself but money is tight and it would mean some borrowing which i would like to avoid if possible

thankyou

anselld

The ground rent can only increase as dictated by the lease. If there is no provision in the Lease for increase then it cannot increase.

pawlala

originally told by whom?
Then offered subsequently for 3.5 times more by whom?

These on the face of it sound relatively cheap figures as its such a recent new-build. There are horror stories appearing every week about costs of purchasing over inflated freeholds, and leaseholds that "double every ten years"

Chanes

We were looking at a new build Barrat house and asked how much it would be to buy the Freehold and the answer...£15,000.

We didn't buy the house.

nazarineo

hi thanks for the replys
Im afraid i was told it would be £1000 only by a salesperson and off the record when being shown the property
Am i right in thinking that someone purchasing the freehold would do so in its entirety including the original agreement and still be bound by those terms ?

G_M

nazarineo wrote: »

Am i right in thinking that someone purchasing the freehold would do so in its entirety including the original agreement and still be bound by those terms ?

????
What terms? The £100 pa ground rent? Yes - but you'd be paying it to yourself.

Or you could abolish the lease and simply own the house as a freehold property.

nazarineo

I have been scouring the paperwork the lease is for 999 years, it says that in 2020 it will become £200 and then can only be reviewed every 5 years and will rise in line with the retail price index ? and whosoever purchases the freehold are still bound to these terms (i should of clarified that in my previous post )
im reasonably happy with this (i think)
i probably should take the paperwork in to a financial advisor or such like for peace of mind

marksoton

nazarineo wrote: »

I have been scouring the paperwork the lease is for 999 years, it says that in 2020 it will become £200 and then can only be reviewed every 5 years and will rise in line with the retail price index ? and whosoever purchases the freehold are still bound to these terms (i should of clarified that in my previous post )
im reasonably happy with this (i think)
i probably should take the paperwork in to a financial advisor or such like for peace of mind

By definition they wouldn't be a freeholder...

pawlala

nazarineo wrote: »

im reasonably happy with this (i think)

Would you be reasonably happy when it rises to £400 in 2025, £800 in 2030 ... £12800 in 2050?

Oh wow. No wonder it was a small'un when it started off. That old chestnut!

anselld

pawlala wrote: »

Would you be reasonably happy when it rises to £400 in 2025, £800 in 2030 ... £12800 in 2050?

Oh wow. No wonder it was a small'un when it started off. That old chestnut!

That is not what the Lease states though is it?

According to the OP it is £200 in 2020 and then RPI thereafter.

And yes, OP, anyone who buys the freehold remains bound by the terms of the Lease.

eddddy

If you buy the freehold (or enfranchise as the lawyers call it), as you've said, you will not have to pay ground rent to anyone.

And you'll probably also be released from other terms in the lease - e.g. getting consent for alterations, getting consent to let - and having to pay admin fees for these.


Also...

Once you've owned the house for two years, you have the statutory right to buy the freehold. There are statutory rules for calculating the price - and it's likely to work out cheaper than the offer from your freeholder.

But the legal/professional fees will be very high, which might outweigh the price saving.

See: https://www.lease-advice.org/advice-guide/houses-qualification-and-valuation/