Purchasing freehold

Biscuitbabe2024 · 24 February at 3:50PM

Hi, does anyone have any experience of purchasing the freehold of their home?

Our lease has 940 years left and we only pay £15 per annum for the lease, but we want to do work to the house (garage conversation, knocking down walls etc) and so would need to get permission from the freeholder to do this work. With our management company, SIMARC, I believe there would be an admin fee then the cost of obtaining a licence to alter which could be thousands given the work we want to do. The other option would be to buy the freehold which again would cost to get a quote therefore we don’t know what it would cost to purchase.

Has anyone bought their freehold and can give me some information on the process and wha that cost?

Sam_666 · 24 February at 4:09PM

https://www.moneysavingexpert.com/mortgages/buy-freehold-right-to-manage/

lewfocus · 24 February at 4:19PM

There's a post on the mortgages section about it

Biscuitbabe2024 · 24 February at 4:22PM

https://forums.moneysavingexpert.com/discussion/comment/81897617#Comment_81897617

thanks but this focuses on flats, my property is a house

eddddy · 24 February at 4:26PM

Sam_666 said
https://www.moneysavingexpert.com/mortgages/buy-freehold-right-to-manage/

@Sam_666 - you've linked to the wrong webpage. That page is about buying the freehold of a block of flats. The OP has a house. As that page says:

Here's a webpage about buying the freehold of a house:

https://www.lease-advice.org/buying-and-selling/buying-the-freehold/buying-the-freehold-houses/

eddddy · 24 February at 4:47PM

Biscuitbabe2024 said
Our lease has 940 years left and we only pay £15 per annum for the lease, but we want to do work to the house (garage conversation, knocking down walls etc) and so would need to get permission from the freeholder to do this work. With our management company, SIMARC, I believe there would be an admin fee then the cost of obtaining a licence to alter which could be thousands given the work we want to do. The other option would be to buy the freehold which again would cost to get a quote therefore we don’t know what it would cost to purchase.

In simple terms, there are 2 ways of buying the freehold of your house:

The statutory route (statutory enfranchisement)
The informal route

Going down the statutory route, the freehold might cost £200 to £300 - but the legal/valuation costs might be £2k to £4k

With the informal route - there are no rules about the cost of the freehold or legal/valuation costs. It's whatever you and the freeholder negotiate/agree on.

Why do you say that the licence to alter might cost thousands? Does your lease say:

No alterations, or
No alterations without the freeholder's consent

If it's option 2, the freeholder cannot unreasonably refuse consent and generally cannot charge you 'thousands' for granting consent

If it's option 1 (i.e. there is a covenant saying 'no alterations'), the freeholder can probably charge you for removing the covenant.

But if it's option 1 (i.e. a covenant saying 'no alterations'), you need to be sure that covenant won't be carried over to the freehold title. (Especially if the covenant is about making external changes to the property.)

Biscuitbabe2024 · 26 February at 2:22PM

https://forums.moneysavingexpert.com/discussion/comment/81897700#Comment_81897700

hi, this is very helpful, thanks so much!

How would the informal route work? Do we just contact the management company to discuss and if it’s informal, how do we know that it’s actually been passed over to us and we own the freehold without having legal involved?

in terms of the licence to alter, my understanding is that when it is bigger works such as a garage conversion etc, it costs more to obtain one and we also need to pay for our and the freeholders legal fees for the?

The lease is old & hard to understand, but says “Not to make or suffer to be made any substantial alterations or addition affecting the elevation exteral structure or stability of any building on the demised premises nor to erect or set up or permit to be erected or set up upon any part of the demised premises any new building or structure without the previous consent in writing of the Lessor”

when you say they can’t charge thousands for obtaining consent, is there regulation regarding this do you know? I wouldn’t know what is classed as reasonable or unreasonable

again, thanks very much for your help :)

eddddy · 26 February at 3:08PM

How would the informal route work? Do we just contact the management company to discuss

You would be buying the freehold from the freeholder - but the freeholder might deal with it themselves or say they want the management company to deal with it. As a first step, you could ask the management company about it.

(But the informal route won't work if there is a head lease / intermediate lease.)

…and if it’s informal, how do we know that it’s actually been passed over to us and we own the freehold without having legal involved?

I'd still strongly suggest that you use a specialist solicitor for this. But there is less 'legal stuff' for the solicitor to do with the informal route than the statutory route, so the solicitor's fees should be less.

in terms of the licence to alter, my understanding is that when it is bigger works such as a garage conversion etc, it costs more to obtain one and we also need to pay for our and the freeholders legal fees for the?

The freeholder/management company can generally charge you a 'reasonable' charge for granting consent. That typically comprises of:

An hourly rate for any admin work they have to do (maybe about £80 per hour)
Any out-of-pocket expenses they have to pay

So

At one end of the scale, if an admin person has a quick look at your plans and writes a document / licence that gives you consent - maybe that's 1 hour of work - so maybe they should charge you £80 to £100

If it's reasonable for the management company to instruct a surveyor to look at your plans (i.e. there's a good reason for a surveyor to be involved), then you'd also have to pay the surveyor's fee