Simultaneous Freehold and Garden Purchase

Maninavan40

Hello All, 
Looking for some advice. Upfront summary we want to buy the freehold and the upstairs neighbours garden. Is it worth doing these at the same time to save on costs? 

We own the ground floor of a Victorian terraced house, converted at some point into two flats. It is leasehold with 123yrs remaining. Upstairs has 121yrs.

The garden is split into two. The ground floor flat has the 60% nearest the house and the upper floor has the 40% at the back. The upper flat has no direct access to their portion of the garden and they have to access it via a pathway to the rear of the street. We are in the middle of the street so it's approx a 700ft/250m walk to access it.

The upstairs flat has recently been extended into the roof and is looking to have it revalued. They have mentioned that they don't use their garden much and can't get planning permission for another dwelling there. They are interested in purchasing the freehold.

I have spoken to an estate agent who has said that the separated garden adds no real monetary value to the upstairs flat and wouldn't change the valuation. Given that it would add a significant amount of space to our garden, it probably would add a bit of value as it would allow for an extension in the future, so we are seriously considering offering to buy their garden. 

Do we wait and do both the freehold purchase and the garden purchase simultaneously. Will we save money? If we did the garden purchase first and increased the value of our flat, would that increase the cost of buying the freehold? Would we have to pay for permission to alter the boundaries?

Are there any pitfalls we need to be aware of? 

Many thanks in advance for any advice. 

Green_hopeful

I don’t know about pitfalls but it’s taking 18-24 months for the land registry to deal with applications so probably best to put them through together. 

eddddy

Maninavan40 said:

we want to buy the freehold...

The upstairs flat.... They are interested in purchasing the freehold.

Just to clarify - I guess you mean that you and your neighbour want to jointly buy the freehold of the property, so that you become joint freeholders of the property.

Maninavan40 said:

we want to buy ....the upstairs neighbours garden.

You need to find out the ownership status of the garden - there are likely to be 2 possibilities:


1) The freeholder(s) 'own' that piece of garden, and your neighbour's lease gives them exclusive rights to use it

• So the neighbour's lease would need to be changed to remove their rights to use that piece of garden
• Your lease would have to be  changed to add rights to use that piece of garden

2) That piece of garden is demised to the neighbour (i.e. they 'own' it) as part of the lease 

• So the neighbour's lease would need to be changed to remove that piece of garden from their demise
• Your lease would have to be  changed to add that piece of garden to your demise

Maninavan40 said:

Do we wait and do both the freehold purchase and the garden purchase simultaneously. Will we save money? If we did the garden purchase first and increased the value of our flat, would that increase the cost of buying the freehold? 

• Changing your lease involves you working with the freeholder

• Changing your neighbour's lease involves your neighbour working with the freeholder

I doubt that you want the hassle of working with your current freeholder before buying the freehold. It will be easier once you both jointly own the freehold. So best to do it at the same time as buying the freehold, or later.

Maninavan40 said:

Are there any pitfalls we need to be aware of? 

If you and/or your neighbour have mortgages, your lender(s) would have to consent to the changes in the leases.

The neighbour's lender might decide that the loss of the garden reduces the value/saleability of the property, and therefore refuse and/or require that they pay off a chunk of their mortgage.

Maninavan40

Thanks Eddddy that's super helpful. I hadn't considered the mortgage aspect of it. 

Maninavan40

And yes, jointly buy the freehold 

Land_Registry

It reads as if it's very much something to do all together. The logical way to do it would be for the other leaseholder to have their lease varied to only include the flat and your own lease then varied to include the extra garden 
At same time the freehold can be acquired with both leaseholders registered as owners, making a note that as and when either of you sold up then the freehold would need transferring as a whole each time.
Lenders always have a say and not just the other leaseholders but also your own
I understand the comment re delays at HMLR but that's not a reason to decide on one option ahead of any other. and a key Q to consider is whether it's 'cheaper' to acquire the freehold as is and then do the variations afterwards - all a Q of how much the freeholder might want for any variations and costs etc 
If you do the freehold acquisition on it's own there's no 'rush' to vary the leases but if one arises a request to expedite the application to update the freehold title can be made. Wait time would be less than 2 weeks unless the application wasn't in order
But as with the wider options being considered that's all going to be part of your thoughts and discussions with the other leaseholder also
So what you are proposing is all perfectly possible if everyone is on same page and in agreement. But what order things are done will be decided on the details involved and what conveyancing, inc changes to any existing mortgages, and legal advice are required