Buying the Freehold of our Leasehold house - rip off?

amylloyd98

Hello,

So, our family has decided that its time to buy the freehold of our leasehold house that we have lived in 50+ years (yes, i know we should have done this sooner). The lease has around 15 years left. We contacted the landlord who owns the freehold, who is also a solicitor, in regards to buying this, so they arranged for their surveyor to come and value our house. We have not received the valuation, but we did get a letter this morning saying the freehold will cost £58,000!!!! Is this a rip off, or am I incredibly naive?

Based on houses on our road, i believe our house would be valued at no more than £280,000 - and we have also spoken to a solicitor who helped somebody else on our road by their freehold from the same landlord for £36,000 just last year!!!

would this price be negotiable at all? Does anybody have any advice? We really do not have this kind of money, but know we really need to buy the freehold, as leasehold houses are a thing of the past….

Slithery

amylloyd98 said:

and we have also spoken to a solicitor who helped somebody else on our road by their freehold from the same landlord for £36,000 just last year!!!

How long did they have left on their lease? The price off the freehold increases massively the shorter the lease - the price you have been quoted sounds about right to me.

amylloyd98 said:

would this price be negotiable at all?

Possibly. But as the freeholder is under no obligation to sell to you at all then why would they want to?

amylloyd98

Slithery said:

amylloyd98 said:

and we have also spoken to a solicitor who helped somebody else on our road by their freehold from the same landlord for £36,000 just last year!!!

How long did they have left on their lease? The price off the freehold increases massively the shorter the lease - the price you have been quoted sounds about right to me.

amylloyd98 said:

would this price be negotiable at all?

Possibly. But as the freeholder is under no obligation to sell to you at all then why would they want to?

Thanks for your reply! I’m pretty sure the lease length remaining is the same as ours, though with one extra year as they bought it last year. 

We also only pay £6 ground rent a year, so I was thinking price may be negotiable for the LL as surely they’d rather circa £30-40k in hand then another £6 in ground rent per year

jimbog

amylloyd98 said:

Slithery said:

amylloyd98 said:

and we have also spoken to a solicitor who helped somebody else on our road by their freehold from the same landlord for £36,000 just last year!!!

How long did they have left on their lease? The price off the freehold increases massively the shorter the lease - the price you have been quoted sounds about right to me.

amylloyd98 said:

would this price be negotiable at all?

Possibly. But as the freeholder is under no obligation to sell to you at all then why would they want to?

We also only pay £6 ground rent a year, so I was thinking price may be negotiable for the LL as surely they’d rather circa £30-40k in hand then another £6 in ground rent per year

What are your plans in 15 years time when the lease  expires? 

amylloyd98

jimbog said:

What are your plans in 15 years time when the lease is expired? 

I am not too sure, this is my parents house who will most likely not be here in 15 years.  Ill be at the beginning of my 40s - worst case scenario would be to sell the house then, but isn’t it incredibly difficult to sell a leasehold house now?

Ksw3

It is incredibly difficult with as little as 15 years left on the lease. I believe mortgage lenders will require something like 70 for them to consider it. It also depends on the terms of the lease. 

I'm not sure how it works so hope someone will be along shortly to confirm, but if the lease expires and the property reverts back to a freehold what will there be to sell? 

RAS

Hi, do you understand that in 15 years the house reverts to the freeholder, with no further recompense to you or your parents?

A lease extension or purchase of the freehold would really have been better done when your parents moved in. Getting  a mortgage on a property with less than 70 years on the lease is well nigh impossible; most providers want 80 years plus.

julicorn

amylloyd98 said:

jimbog said:

What are your plans in 15 years time when the lease is expired? 

I am not too sure, this is my parents house who will most likely not be here in 15 years.  Ill be at the beginning of my 40s - worst case scenario would be to sell the house then, but isn’t it incredibly difficult to sell a leasehold house now?

You won't be able to sell it then, it won't be yours any longer.

amylloyd98

Thanks for all of the replies - i really wasn’t aware of this. So even though we have fully paid off the mortgage on the house, as soon as the lease expires, we no longer own the house, or just the land it sits on?

Also, as we do not have £58,000 just lying around, is there any suggestion as to how this could be paid? Would it have to be a loan of some sort? I really want to help my parents out on this so all the advice is greatly appreciated

RAS

Basically a lease is like a long rental that is can be extended at a price.   So by leaving this so late, your parents have made the whole exercise much more expensive.

Ca any of you get a mortgage?

amylloyd98

My parents are in their late 60s so doubt they can get a mortgage for this? I am in my mid-20s and planned on getting mortgage next year in hopes of buying my first property - I’m assuming I can’t do both