Difference between 'share of Freehold' & long lease

doccer1967

Hi all

I am looking at buying a flat in Hove (BN3). I have looked at two flats in the same block, same size, so no real difference. The only major difference between them is: flat A has share of freehold and a 900+ year lease; flat B only has a 900+ year lease

However, the price differential is c.£50k!!

So is having a share of the freehold so valuable given the lease length is the same and way above the 100+ years the mortgage companies recommend?

There are some minor cosmetic differences, but the cheaper flat needs less work doing to it

So cannot figure out why there is such a differencial

All feedback and views would be welcome, thanks in advance

Dave:)

KiKi

Couldn't comment on the difference in price. The value in a share of the freehold depends a little on the block you're buying in. If you're talking a Victorian conversion (also live in Brighton) where you co-own the freehold with a couple of other people and can run it yourselves, then it means you have control over any work on the building, the costs, the insurance etc.

If you are in a large flat complex where there's a management company and multiple co-freeholders then the value of the freehold is, IMO, less, as you're going to have far less control over freehold costs anyway.

How many in the block?

KiKi

OOI, who are the respective EAs for the cheaper and more expensive ones?

doccer1967

Hey KiKi
the block is on Furze Hill, so there are loads of flats (at least a 100). also the management fee for both is the same but the lease hold one i pay a nominal ground rent of £50 per year. The outstanding lease for both is 900+ years. I cant figure out why. I am re-looking at both tomorrow and will make an offer..

thanks

Dave

TrickyDicky101

Possible Ground Rent differences? Otherwise likely due to the location (maybe)?

doccer1967

The expensive one is https://www.brandvaughan.co.uk and the cheaper one is Yopa. The interesting thing is the cheaper one was put on the market at the same price as the expensive one (£375k) and it has gradually decreased in price to its current value of £325k - it has been on the market for several months...

KiKi

Ah, Brand Vaughan! I did wonder if it was them or F&S. BV are notorious for overpricing in Brighton. I bought my current place from them, and negotiated down significantly. I tried to sell my old flat with them, and they valued it £30k more than it was already on for (bearing in mind it had been on sale for 3 months with no offers).

They had a small 2 bed flat for sale above a shop in Fiveways a couple of years ago, smaller than my then 2-bed flat (and it was small!), for £400k!!!

Don't forget to check ground rent. One of the flats says £1200 service charges every 6 months - that's fairly high in Brighton, but perhaps standard for a larger block.

TBH, if you're prepared to pay that to live in Hove, there are nicer flats out there with far lower service charges and a share of freehold, where you won't be subject to the potential huge maintenance works on a building like that one, but that's JMO!

doccer1967

KiKi
I am relocating and this area was suggested to me by a co-worker. The service charge also includes heating and water - though I agree it is a bit high. I am trying to avoid house conversions as there are some absolutely terrible ones about - hence the purpose built block.

I have looked also at some places in kemp town also, but find the EA in the area terrible. Any areas I should also be considering?

kind regards

Dave

KiKi

Victorian house conversions in Brighton are the norm, and to be fair most of them are very good.
What's your budget, and what are you looking for (2 beds? Flats?)?
What type of area are you after (arty? young? family? close to town?)?
Where are you commuting to / working?
Will you have a car?

doccer1967

KiKi
the budget is max 400k. Area wise looking for close to town or at least to get into town - I guess somewhere that is not 'party central'. I work in the laines and have a car (I know parking is problematic)
all help appreciated

dave

benjus

If the flats are in the same block, then the freeholder must be the same entity, and if one of them has share of freehold then it seems fair to assume that this entity is owned by residents - presumably the owner of the cheaper one decided not to participate in the freehold purchase. So if you bought the cheaper one, there may be an option to buy a share of the freehold company later on.