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Worth buying freehold

wrlfc
wrlfc Posts: 13 Forumite
Part of the Furniture First Post
in House buying, renting & selling
I have just received a letter from my freeholder to pay my yearly ground rent. £7.50 per year.
Included was another letter with an offer to buy the freehold for £695. Apparently she is considering selling a large proportion of her freehold rents to an institutional investor. 
Me and my wife have lived at my property for over 20 years and have no intention of ever moving and my children will get the house when we pass away. 
My ground rent has always been £7.50 ever since we moved here. 
I wonder what people's thoughts are on this. My biggest concern is the words institutional investor. Surely an investor would want a decent return and I am concerned the ground rent would rocket in price 
Many thanks. 

Comments

  • user1977
    user1977 Posts: 19,270 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    Neither the freeholder nor the leaseholder can unilaterally change the ground rent (apart from any mechanism which is already in the lease).
  • CapricornLass
    CapricornLass Posts: 844 Forumite
    Part of the Furniture 500 Posts Name Dropper Debt-free and Proud!
    May be worth it for peace of mind, though, especially in view of the amount being charged?
    Sealed Pot Challenge no 14
    Fashion on the Ration - 5666 ( 5 - shoes, 1.5 - bra, 11.5 - 2 pairs of shoes and another bra, 5- t-shirt, 1.5 yet another bra!, 3 coupons swimming costume 1.5 yet another bra, 10 coupons, 2 jumpers, 6 coupons 6 prs of socks, work trousers and steel toe capped boots, 11 coupons)
  • caprikid1
    caprikid1 Posts: 2,568 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    I asked my parents to buy theirs in the same situation one less thing.
  • Tabieth
    Tabieth Posts: 493 Forumite
    100 Posts First Anniversary Name Dropper Photogenic
    Yes. Absolutely buy it. 
  • kipsterno1
    kipsterno1 Posts: 535 Forumite
    Tenth Anniversary 500 Posts Name Dropper Combo Breaker
    Does that price include any legal fees or other charges? How long is the current lease for?
  • eddddy
    eddddy Posts: 18,458 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 2 December 2025 at 9:15PM


    You would probably need to pay the freeholder's and your own legal costs on top of the £695 quoted.

    Presumably you have a long lease - maybe 900 years+?

    If that's the case, to be honest, £695 is a bit steep. (An institutional investor would pay much less than that.)

    If you bought the freehold using 'Statutory Enfranchisement', it would probably cost around £150 - but the legal costs would be higher. So while the freehold might be cheaper, the legal costs might outweigh that.


    The main reason for buying the freehold might be so you are no longer bound by the covenants in the lease - for example, requiring consent for alterations, prohibited from sub-letting, etc.


  • wrlfc
    wrlfc Posts: 13 Forumite
    Part of the Furniture First Post
    "£695 includes fees associated with the transaction including the registration of your title at the land registry and it also includes the next year's rent due in" 
  • jimbog
    jimbog Posts: 2,298 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Some buyers have an aversion to anything that says ‘leasehold’ so you’ll be doing your children a favour if or when they ever decide to sell.
     Buy it 
    Gather ye rosebuds while ye may
  • monkey-fingers
    monkey-fingers Posts: 343 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    wrlfc said:
    "£695 includes fees associated with the transaction including the registration of your title at the land registry and it also includes the next year's rent due in" 
    I'd be all over that.

    Buy it.

    This is what can happen (and is happening!)
    https://www.sheffieldtribune.co.uk/a-london-lawyer-bought-hundreds-of-sheffield-freeholds-then-the-very-aggressive-letters-arrived/
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