Freehold V leasehold

Katykat

We have a detached leasehold house. We THINK there’s about 40 yrs left on the lease & we pay £15 p year. We are both 65. My Oh wants to get a quote to buy freehold, I’m more reticent, only about the potential cost, but I’ve agreed to get the quote ( which costs £95). What advantages are we likely to gain or would it all be a loss. We have no current intentions to sell the house.
Incidentally, some years ago we had a small utility room extension which we were not aware we had to apply for permission for. I think this would be discovered and have to pay a fine if we went ahead with the purchase.

eddddy

By paying £95, you are inviting the freeholder to suggest a price for the freehold. They might (or might not) suggest a ridiculous price.


As an alternative route, you probably have the right to compulsorily purchase the freehold - and the law says how the price should be calculated. You might (or might not) find that this route is much cheaper.

Here's some info on that: https://www.lease-advice.org/advice-guide/houses-qualification-valuation/


If there is only 40 years left on the lease, if you don't buy the freehold, your house is likely to go down in value as time goes by.

With 40 years left on the lease, buying the freehold is likely to be expensive - but if you use the "compulsory purchase" route, it should make you an instant profit 'on paper'.

i.e. The freehold house would be worth more than...

... the leasehold house plus the cost of buying the freehold.

But obviously, you would only get that profit when the house is eventually sold.


You might have to pay admin fees to the freeholder, for granting retrospective consent for the extension. But they cannot 'fine' you or charge any kind of penalty - that would be illegal.

And don't volunteer information about the extension - they might not come and look.

davidmcn

Katykat wrote: »

I think this would be discovered and have to pay a fine if we went ahead with the purchase.

Why do you think you would have to pay a "fine"?

PasturesNew

Get the quote, if you can buy the freehold then do so. You might not be selling... but you don't know what the future holds and, when it NEEDS to be sold, this could make it unmortgageable, untouchable, or sold at a very stupidly low price.

Somebody has to sort this out at some point .... do it now, while you're able and while it'll never be as cheap again.

chalky_white_2

As a note, you should bear in mind that your family, upon both of your deaths, will need to deal with the Property. A Leasehold interest with such a short term will be difficult to deal with. A Freehold interest will be as easy as any other 'normal' Property.

At the very lease, you should consider extending the Lease Term so that it has sufficient years to allow a mortgage company to lend on it (thereby increasing the pool of potential Buyers).

However, the choice is yours, and either option this will come at a large cost to acquire the new interest. For your personally, the options make little difference to your situation, only to your family upon your death.