Valuing a Basement in a Shared Freehold Property

tekton23

Hi,

I live in a Ground floor flat in a Victorian conversion with 6 other flats in the building. The owner of each flat has a share of the freehold and a lease in place with the freehold company. Each owner is also a director of the freehold company.

I am interested in building a basement and will need to obtain:

a) an extension of my lease to include the basement
b) a License to Alter (under the terms of the lease)

For the lease extension, ultimately as I understand the process, this will involve me paying a fee to the other freeholders. There are various ways of calculating this fee and I believe I need a surveyor to do this. However, the surveyor's fee itself, will be thousands and if they return a high estimated fee due to the other freeholders, the project will not be feasible (given the other construction costs, fees and insurances required).

How can a I broadly understand what fee will be due to the other freeholders, without spending thousands in the first instance, for what could be an abortive project?

I am just hoping to obtain a broad estimate, that will enable me to assess feasibility.

Thanks,

T23

need_an_answer

Genuine advice is to move somewhere that will give you the space you need rather than trying to adapt this space.

It will be costly and then you will face the conversion costs on top,at which point you wont end up with something that's worth anything near what you've spent on it

Slithery

There is no formula to calculate the cost, it's a negotiation between you and the freeholder.

Have you asked the other part owners of the freehold what sort of figure they are expecting?

tekton23

No I have not asked them yet, as it is a sensitive subject and I would like to gauge if we can afford the whole project first.

I have no idea of the likely order of costs that could be paid to them.

Slithery

tekton23 wrote: »

No I have not asked them yet, as it is a sensitive subject and I would like to gauge if we can afford the whole project first.

I have no idea of the likely order of costs that could be paid to them.

And you will continue to have no idea until you ask them.

They may be willing to do it for just the solicitors costs, or they could want £100k each, or just outright refuse.

G_M

How much more valuable will your flat become once it includes the basement.......?

AlexMac

A obvious answer to the original valuation question is that the basement's worth a % of the uplift in value were the conversion to have been completed; although you could argue where the conversion cost figures in the formula. So work out what an additional 1,2 or 3 rooms or so would cost in your postcode and start from. say, 50% of that as a ball-park figure that you'd have to chip in to the House funds.

However, a bigger issue is whether the other leaseholders in the house would object on personal grounds- rational or irrational?

A similar issue arose in a shared freehold where we owned a leasehold flat; except that it concerned the loft. The question about whether we (as a freehold Company) would be likely to sell the loft space and agree a loft conversion was posed by the person who was about to buy the top floor flat. This occupied the whole upper level in a four storey six-flat building, so in practice no-one else had easy access to it .

His question- in principle, as he had not yet even bought or even exchanged - prompted a meeting of the Freehold Company which was made up of the six leasholders in this 19th Century converted block.

The owner of the flat below the top one went ballistic; he just couldn't cope with the idea of building work going on above him. It didn't come to anything, because the buyer dropped the idea, but continued with his purchase without the likelihood of being able to do the loft works.

But it would have got ugly if he'd persisted. So what's your relationship like with the other leaseholders? They might not fancy works below them; even if the builders were competent and insured, and they had party wall agreements ad Party wall surveyors (again, all at your expense). And that's before you consider issues of Planning and Building Control. My local Council publish helpful guidance on Conversions and extensions, including basements, to help people assess what's likely to be approved, or assess if Planning Consent is needed. Even if not, Building Regs will still probably apply.

So maybe worth chatting to a builder (who will of course say "no problem"), nosing around your local council, checking Estate Agents for prices of larger flats and infomally consulting your co-freeholders before spending too much?

Doozergirl

Are you in London? If you aren't, it is highly unlikely to be a financially viable option.

Tom99

The other freeholders do no have to offer to grant you a lease extending to the ground beneath your existing demise.
If I was one of those freeholders given the likely disturbance and also risk of structural problems with the existing foundations I would refuse whatever the price.
I think you should test their likely reaction to your scheme before spending any money.

martindow

I can see what could be in it for you but I can't imagine other people in the building being keen. Weeks of noisy and disruptive work and possibly worries about undermining the foundations ...


I would look around for places already built that meet your needs.

zagubov

Doozergirl wrote: »

Are you in London? If you aren't, it is highly unlikely to be a financially viable option.

I've seen several attempts at this in London, but it's expensive, pretty unpopular with neighbours, and can go spectacularly wrong.

Do all mortgage lenders and insurers in the building need to be on board as well as the homeowners, because I'm not sure I've heard of this ever happening in a divided property? Good luck with getting it all agreed.

To be honest, it looks like it would be nothing but unnecessary and unwanted trouble, a bit like trying to climb mount Everest from the inside, using a toothpick.

As martin says, look elsewhere.