Updates on leasehold changes 2020 and Coronavirus impact.

topoftherock

Hi guys, have there been any updates on the leasehold changes for this year? Moreover, due to the Coronavirus, do you think it could be a good time to put in an offer to buy the freehold? **Some background information-we have a terraced house, a 50-year extended lease which started in 2010 (I.e there are 40 years left) and the freeholder wanted around £22,000 just before it was extended in 2010 (we pay a fixed £1,000 per year ground rent, which was initially £2 per year from 1911 to 2010 I.e on the original 99-year lease).  However, the house would only be worth around £45,000 now even if it was a freehold property (it’s in a really bad state, and it needs around £30k renovation work).  Lots of work needs to be done to the house, and similar-sized houses (in good/modern condition) in the street sell for around £75,000 as freehold properties. We have around £15,000 in savings, which we think would be a fair price for the property*** Thanks  for reading. 

anselld

Unfortunately the freehold purchase value will be more influenced by the ground rent than the state of repair.  Try some of the online calculators but you are probably looking closer to £25,000.

Why on earth did you agree such a high ground rent?

eddddy

As anselld says, the condition of the house probably won't be taken into account when valuing it.

i.e. Depending on the valuation method used - it will probably be valued as though it was in the same condition it was in when the lease was granted.

The reasoning behind this is that the lease probably states that you (the leaseholder) must keep the house in good condition. If you've breached the lease by failing to keep the house in good condition, you shouldn't profit from breaching the lease by getting the freehold cheaply.