Flat Purchase - Escalating Ground Rent

akorn77

Just to circle back here - wouldnt it be simpler to buy the share of freehold?

Tom99

akorn77 wrote: »

Just to circle back here - wouldn't it be simpler to buy the share of freehold?

You can only do that in conjunction with the other leaseholders and even if you do buy jointly buy the freehold you are still stuck with the lease you have in terms of it's length and ground rent until the joint freeholders agree to change things.
Also you would have to purchase the freehold at market value which would include the benefit of any rising ground rent so it would be no cheaper than extending the lease.

Marvel1

Ma way of thinking:

£150 = £12.50 monthly for a year.

£300 - £25 monthly for a year.

Increase of £12.50 a month after 25 years.

Considering people renting and an increase say after first year jumps from £30-£50 monthly, and most say suck it up as it's the current market, the 25 year increase is nothing.

However me personally would never buy leasehold.

akorn77

Tom99 wrote: »

You can only do that in conjunction with the other leaseholders and even if you do buy jointly buy the freehold you are still stuck with the lease you have in terms of it's length and ground rent until the joint freeholders agree to change things.
Also you would have to purchase the freehold at market value which would include the benefit of any rising ground rent so it would be no cheaper than extending the lease.

Noted, thanks. There's ALOT of flats in the building so this wouldnt be feasible then.

Marvel1 wrote: »

Ma way of thinking:

£150 = £12.50 monthly for a year.

£300 - £25 monthly for a year.

Increase of £12.50 a month after 25 years.

Considering people renting and an increase say after first year jumps from £30-£50 monthly, and most say suck it up as it's the current market, the 25 year increase is nothing.

However me personally would never buy leasehold.

Price-wise it is reasonable. I'm not a fan of leases but in central london its hard to find decent Share of Freehold flats, that also come with secure parking.

I have asked the vendor to ask the Freeholder if they would be willing to change terms of the ground rent in the future. The Freeholder is a big company, and there is hundreds of flats in the development so I suspect the answer will be No.

All a bit disheartening, as the flat ticks all my boxes

Crumble2018

akorn77 wrote: »

I'm not a fan of leases but in central london its hard to find decent Share of Freehold flats, that also come with secure parking.

I think you'll struggle to find a modern block of flats without an esculating ground rent. (Certainly where I live they are extremely common) Lenders are happy to lend on a 25 year doubling clause, so I'm not sure why you're so worried about it?

I'm also baffled as to why anyone would want a share of the freehold, as that can lead to all sorts of trouble if your fellow freeholder/s don't want to stump up money for repairs.

akorn77

Crumble2018 wrote: »

I think you'll struggle to find a modern block of flats without an esculating ground rent. (Certainly where I live they are extremely common) Lenders are happy to lend on a 25 year doubling clause, so I'm not sure why you're so worried about it?

I'm also baffled as to why anyone would want a share of the freehold, as that can lead to all sorts of trouble if your fellow freeholder/s don't want to stump up money for repairs.

Indeed it is very common. However there are many blocks that dont have these types of clauses, but they make up the shortfall by charging expensive services charges £3-5kpa. In retrospect, I'd prefer this over a £3kpa service charge.

With Share of Freeholders you have more discretion of the block/property & no ground rent I guess. These do often still have services charges and a management company (appointed by Freeholders) so it isn't one big free-for-all dispute.

davidmcn

Crumble2018 wrote: »

I'm also baffled as to why anyone would want a share of the freehold, as that can lead to all sorts of trouble if your fellow freeholder/s don't want to stump up money for repairs.

I'm baffled as to why anybody would want the freehold to be owned by a third party aiming to make a profit out of everyone.

Crumble2018

davidmcn wrote: »

I'm baffled as to why anybody would want the freehold to be owned by a third party aiming to make a profit out of everyone.

I'm basing this on stories I have read where other freeholders wont pay out for repairs/insurance etc. I'd rather be paying someone else to sort these things out for me, but maybe thats just my preference.

Tom99

akorn77 wrote: »

I have asked the vendor to ask the Freeholder if they would be willing to change terms of the ground rent in the future. The Freeholder is a big company, and there is hundreds of flats in the development so I suspect the answer will be No.
All a bit disheartening, as the flat ticks all my boxes

You can buy out the ground rent after 2yrs or immediately if the seller has owned the flat for 2yrs so I would not place any value on what the freeholder says. If you try and negotiate something outside the statutory process in all likelihood the freeholder will take for a mug and charge more than you might otherwise pay.

davidmcn

Crumble2018 wrote: »

I'm basing this on stories I have read where other freeholders wont pay out for repairs/insurance etc. I'd rather be paying someone else to sort these things out for me, but maybe thats just my preference.

You can appoint a management company to sort things out while remaining in charge. In practice, if the other leaseholders don't want to pay for anything then you've still got problems whoever the freeholder is.