Purchasing Freehold

2006Kuredu

Hi All,

Seeking everyones opinion please. I have lived in the same property for 7 years now and have no immediate plans to sell and move. The ground rent is £17.50 per 6 months and has not increased since I have owned the property.

I have today received an offer with my demand to sell the freehold for £1,560 including land registry fees. Whilst obviously this will not pay-back in my lifetime given the low ground rent would you consider it a worthwhile purchase? Would it potentially increase the value of the property (4 bed detached)

Welcome your views and opinions

tim9966

Yes, or at least make more people consider buying it as lots would rule out leasehold.

Slithery

If you can spare the money then I'd do it without question, just to give yourself a far larger market when you do sell.

Mossfarr

I purchased the freehold of my ex-local authority property for roughly the same price a couple of years ago now. The ground-rent for mine was "two peppercorns" so actually nothing to pay.
I have been asked a few times "why did you bother" as there was no apparent advantage to owning it.

My main reason was that it will have a wider appeal when we decide to sell it - there is a lot of negativity about leasehold properties at the moment.

There were other advantages too - not having to apply (and pay a fee) for permission to extend, change the fences, erect a shed, add a conservatory. Not having to redecorate internally and externally to a specific timescale etc.
You need to read your lease to determine the terms you are expected to adhere to.

Overall though, my main reason was that when it is leasehold you never actually own the property and even though my lease had over 800 years on it, at some point in the future it would need to be addressed (even if it wasn't in my lifetime)!

Don't forget you will also have legal costs.

2006Kuredu

Thanks everyone, seems the general consensus is buy it

zagubov

Another vote for buying it, as while it might not directly make more money, it could very easily attract more interest, giving you more leverage when buyers try to bargain down the price etc.

Plus nobody to ask permission from for improvements.

Tom99

it would give you a return of 2.25% whilst you own it and given its 4 bed detached I would think you will make a handsome profit when you sell it freehold rather than leasehold.

2006Kuredu

I can't work out how you get to the return Tom99 but thanks, it does seem its money well spent if I proceed with the purchase of the freehold.

Norman_Castle

£1560 is only a tiny proportion of the price of an average 4 bed detached house. Highly likely you would get it all back when selling.

AdrianC

Tom99 wrote: »

it would give you a return of 2.25% whilst you own it

2006Kuredu wrote: »

I can't work out how you get to the return

£17.50/6mo = £35/yr
£35 is 2.25% of £1,560 - assuming no increase in the ground rent.

So you invest the £1,560, you effectively get a 2.25% return on that investment.
Whether you get your capital back at sale of the property is the question.
Will it add to the value? Possibly, possibly not.
Will it make the sale easier? Possibly, possibly not.

You don't mention the length of the remaining lease?

Smi1er

Offer £1,100?

If refused then simply buy it. Simply because it opens your selling market a lot more