buying freehold of house that has had subsidence

78daniel

anyone had any experience of this, and would the freehold be easier/cheaper to purchase in this instance?

twopenny

If it has had subsidence and been fixed - then the price would still be what someone would offer so great place, great location etc all comes into play.

Is there the relevant paperwork on the fixing, how long ago?

It's not an automatic that it will go for less than market price. Heck, there was a bungalow where I lived that needed the whole internal floor replacing. Lovely building went for less but only by the amount to fix the problem. Went quickly too.

eddddy

Do you mean that you own a leasehold house (which has had subsidence) and you want to buy the freehold - using the 'formal' route called 'statutory enfranchisement'?

If so, has the subsidence been fully repaired? Did the subsidence happen after the lease was granted?

The short answer is that the subsidence probably won't make any difference to the price of the freehold.

It's a bit complicated…

• The legal formula for calculating the price of the freehold takes into account the 'Market Value' of the house - assuming the house is in the same condition it was when the lease was granted.

• On one hand, the subsidence history might reduce the current 'Market Value' of the house. On the other hand, presumably it had no subsidence history when the lease was first granted.

• But depending on the lease length, the difference in 'Market Value' between a house with or without subsidence might make very little difference to the price of the freehold anyway.

• If the subsidence hasn't been repaired, the 'Market Value' would be assessed as though it had been repaired. (i.e. you won't get the freehold at a discount, because you've failed to repair the house)

If you give more info about the situation, it might be possible to comment further. (Including lease length, ground rent and market value)

78daniel

Least length 103 years left

Ground rent annual £5

Approximate value 160000

eddddy

78daniel said

Least length 103 years left

Ground rent annual £5

Approximate value 160000

With a statutory enfranchisement on a 103 year lease, a £50k reduction in market value might reduce the the freehold price by about £300.

The cost of the freehold might be around £3.5k to £4k, with £3k to £4k fees on top.

So even if you got agreement that the subsidence history reduced the market value by £50k (from £160k to £110k), you'd probably only save £300 - and the costs of the extra negotiation might be higher than £300.

And I'm not sure you'd get agreement on a reduced market value anyway.

So the bottom line is that the subsidence history will either make no difference, or very little difference.