Freehold flat

Hipperty

Hello, looking for some advice or information signposting please.
First time buyer looking to by a flat. A nice one has become available and is the upstairs of a converted semidetached house. It seems that this flat has the freehold of the building. The downstairs flat is let and as yet, I am unsure of the lease arrangements but will endeavour to find out. Please can anyone advise on whether or not having the freehold to the building is an advantage or a disadvantage? I'm guessing it means taking on landlords responsibilities of which I have no knowledge, so would be grateful for any advice or signposting to reliable information sources.
Many thanks.

anna42hmr

Hipperty wrote: »

Hello, looking for some advice or information signposting please.
First time buyer looking to by a flat. A nice one has become available and is the upstairs of a converted semidetached house. It seems that this flat has the freehold of the building. The downstairs flat is let and as yet, I am unsure of the lease arrangements but will endeavour to find out. Please can anyone advise on whether or not having the freehold to the building is an advantage or a disadvantage? I'm guessing it means taking on landlords responsibilities of which I have no knowledge, so would be grateful for any advice or signposting to reliable information sources.
Many thanks.

Do you mean that the flat comes with a share of the freehold? This is where the owners of the property also own shares in the freeholding company? If so, it can be quite useful to own a share of the freehold, as for example at the flat i own, we have an AGM in which we determine what service charges are applied, what works need doing to the communal areas, what issues are coming up that need addressing etc.

In respect to lease holding you may wish to take look at the link below:

https://www.lease-advice.org

Hipperty

No, the Estate Agent said that the upstairs flat had the freehold for the building, which includes the two flats.

HampshireH

You would have freeholder responsibilities. The leaseholder of the flat below would have landlord responsibilities for those they rent it out to.

Your responsibilities would include keeping the building maintained and in good state of repair. New roof? You sort it.

You would need to collect any service charges and ground rent.

https://england.shelter.org.uk/housing_advice/repairs/responsibility_for_repairs_in_leasehold_flats_and_houses

G_M

It is to your advantage in that you and you alone can decide what work needs doing. You an shop around for contractors, and decide who to employ, when and how much.


On the other hand you have the hassle of collecting money from the other freeholder for ground rent, insurance, service charge and any one-off repair costs.

Tom99

On the whole you will be better off. Mug up on your responsibilities as a freeholder, you need to send a rent demand to collect ground rent, notice of expensive repairs etc.
If the ground floor lease has say under 90yrs remaining the you may benefit from a lease extension premium if your tenant want to extend there lease at some point in the future.

Hipperty

Thanks everyone. I will do some research into freeholder responsibilities.

eddddy

If you're buying with a mortgage, it would be better if you bought the property in 2 parts:

1. The leasehold of the upstairs flat
2. The freehold of the building

It will be more straightforward to get a mortgage on a leasehold flat, and the cost of the freehold is likely to be negligible.

It will also be easier to sell on, with that structure.

Hipperty

Thanks eddddy. Would that require the seller to set up a lease now? There is currently no lease on the upstairs flat, just the freehold for the whole building. Would it be costly? Presumably it would also need to be added to the land registry, which could take some months?

AdrianC

Hipperty wrote: »

First time buyer looking to by a flat. A nice one has become available and is the upstairs of a converted semidetached house. It seems that this flat has the freehold of the building.


Please can anyone advise on whether or not having the freehold to the building is an advantage or a disadvantage?

It means that you would be buying two things.

You would be buying a leasehold flat, and you would be buying the freehold of a house which contains two flats.

Being the freeholder isn't quite the same as being a landlord - you're likely to need to arrange repairs and buildings insurance, then split the cost with your downstairs neighbour, and that's about it.

If they have a very short lease, and they allow it to expire, then you own their flat.
If they want to renew and extend their lease, then you receive the money from that extension.

Hipperty

AdrianC wrote: »

It means that you would be buying two things.

You would be buying a leasehold flat, and you would be buying the freehold of a house which contains two flats.

Being the freeholder isn't quite the same as being a landlord - you're likely to need to arrange repairs and buildings insurance, then split the cost with your downstairs neighbour, and that's about it.

If they have a very short lease, and they allow it to expire, then you own their flat.
If they want to renew and extend their lease, then you receive the money from that extension.

That's where I am misunderstanding I think. There doesn't seem to be a lease on the upstairs flat, at least it's not mentioned in the Land Registry title register, it says freehold and just makes reference to the lease of the downstairs flat.