Buying freehold of terraced house

shaunthesheep123

Any advice about if buying the freehold of my house is a good idea? I live in a modest terrace house, mortgage paid off with no plans to move for the foreseeable future.  All other houses in the location are freehold, but for some reason the people who owned the house in 1964 sold the freehold with a 800 year term.

The ground rent was set at £10 a year, and that is what I am still paying, so the cost of the ground rent isn't an issue.

eddddy

If you were to buy the freehold using the statutory route (a type of Compulsory Purchase) it should cost you less than £200 - but the legal fees might total £2k to £3k. 

(You have to pay your legal fees plus the freeholder's legal fees. Those fees might reduce once the reform legislation is enacted.)


The only real benefit to buying the freehold might be if there are covenants in your lease which you want to get rid of. For example, the covenants might include...

• You need consent for alterations (and so have to pay a fee for consent)
• You need consent to rent out the house (and so have to pay a fee for consent)
• You need consent to keep a pet (and so have to pay a fee for consent)

etc.


Sometimes freeholders will do an informal deal - they charge you more for the freehold (e.g. £600) but offer a 'fixed legal fee' which works out cheaper overall.

But there are potential pitfalls with doing an informal deal - for example, if there's an intermediate leaseholder - so you should get everything checked by a solicitor.