Ground rent clarification.

Skynet5

But this seems a way. I can't link it but google "help-me-validate-my-rough-calculation-to-buy-a-share-of-my-freehold"

* GR/POWER(1+0.065, Year)

GR | Adjusted PV at 6.5%* | Year

230 215.9624413 1
230 202.781635 2
230 190.4052911 3
230 178.7843109 4
230 167.8725924 5
230 157.6268473 6
230 148.0064294 7
230 138.9731732 8
230 130.4912424 9
230 122.5269882 10
230 115.0488152 11
230 108.0270565 12
230 101.4338559 13
230 95.24305716 14
230 89.43010062 15
480 175.2457575 16
480 164.550007 17
480 154.5070489 18
480 145.0770412 19
480 136.2225739 20
480 127.9085201 21
480 120.1018968 22
480 112.7717341 23
480 105.8889522 24


Filling that down to 999....roughly 6k

I've not calculated the reversion as of yet.

Tom99

Yes that's it. The reversion will be a tiny fraction of 1p.
The negotiation will be about the discount rate

Skynet5

The discount rate being the %, which I've put at 6.5%?

Skynet5

As a little hobby for an evening I'll put this formula onto a web page with the options of different models (doubling etc...) and shove it on to AWS. It might help future people as it seems to have been asked a few times before.

Will let you know once I've done it.

Skynet5

I have phoned up my freeholder and they said I must write in for an accurate quote, although I was given a ballpark over the phone.

Is there any reason why I should not do this and only go via a solicitor from the get go?

There was no charge to get a quote. And I'm undecided if it is really worth while buying it.

Tom99

Skynet5 wrote: »

I have phoned up my freeholder and they said I must write in for an accurate quote, although I was given a ballpark over the phone.
Is there any reason why I should not do this and only go via a solicitor from the get go?
There was no charge to get a quote. And I'm undecided if it is really worth while buying it.

Since your lease is for 999yrs there is no harm in doing that, as its not like you only have 81yrs remaining where time would not be on your side.

Skynet5

Tom99 wrote: »

Since your lease is for 999yrs there is no harm in doing that, as its not like you only have 81yrs remaining where time would not be on your side.

Thanks. I've contacted via email and asked for an official quote, as the one over the phone was only verbal.

It didn't seem unreasonable. I presume the calculation I did above is pretty much what the law says should be used. So if they come back with something silly I guess I then just speak to a solicitor. I used a capitalisation rate of 6% to work out a figure and they gave me the same rough figure. But I think they just multiplied my initial ground rent by 30 ?!?!

Does the formula have a name?

Tom99

Skynet5 wrote: »

Does the formula have a name?

NPV = Net Present Value
PV = Present Value
YP = Years Purchase = PV of £1pa
Capitalisation Rate/Discount Rate = same thing, how much less in %age terms is £1 payable in 1yrs time.

Skynet5

Hi. So I got my quote. Seems reasonable.

What would a typical solicitor cost be to manage the legals for buying a freehold?

Never really engaged one before, so I'd like to have a feel for the cost.

anselld

Skynet5 wrote: »

Hi. So I got my quote. Seems reasonable.

What would a typical solicitor cost be to manage the legals for buying a freehold?

Never really engaged one before, so I'd like to have a feel for the cost.

MSE Guide suggests about £2000 which includes the Freeholder's costs. Should hopefully be a bit lower if you have already agreed a valuation.