Buy Your Freehold - guide discussion

Janzzz wrote: »

Anyway, please, could you tell me the realistic value difference if
The lease is only as is 54years
If I extend it by 90years = 144years

It's probably best to ask local estate agent(s) who know prices in your area.

Tell the estate agents that you are thinking of selling, and are unsure whether to extend the lease first.

Janzzz wrote: »

Or if I buy the freehold?
The same flat next to us was sold for £400k but it was freehold.

You cannot buy/own the freehold of a single flat. You can only buy/own the freehold of a whole building.

Who currently owns the freehold of the building? (The freehold of the building might be owned by one or more of the other leaseholders.)

Janzzz wrote: »

The last question is - Do I have to pay freeholder for telling me how much they want for the freehold or extended leasehold? I'm asking them last few years and they never reply - telling me I should hire a surveyor for the appraisal - but I just want them to tell me what is their expectation.

You cannot force the freeholder to suggest a price for extending a lease.

You are free to make an offer for extending the lease, which the freeholder is free to accept or reject.

To decide how much to offer, you can...

• Pay a surveyor to do a lease extension valuation
• Get an idea from the online calculators
• Pick a number out of the air

etc

Here are a couple of examples of lease extension calculators:

https://www.lease-advice.org/calculator/
http://www.myleasehold.co.uk/lease-extension-calculator

Ideally, you should insist on zero ground rent.

If the freeholder isn't interested in discussing this with you, you can force them to give you a lease extension using the statutory process
See: https://www.lease-advice.org/advice-guide/lease-extension-getting-started/

Hi Janzz, when I wanted to extend my lease the freeholder offered me a stupid deal which included a new ground rent that doubled every 10 years!! So then I used a specialist leasehold surveyor, who negotiated for me and got me a very good deal, I increased my 65 year lease to 165 years, with no ground rent. The surveyor charged me a fixed fee and this would have included representing me at a tribunal if it had become necessary. There were solicitor charges and you will have to pay the freeholders expenses too, but get some specialist help is my advice. You must have your own surveyor, mine did all the work and it was a great weight off my mind! I know that sounds harsh but you will either not be able to sell or you will not get a decent price for your property otherwise.

Janzzz wrote: »

Thank you very much for your reply Joan. You are totally right.
The fix fee is a great idea... so, we don't end up paying unexpected cost.
We are looking at the option to take the case to the Leaseholders tribunal.
I'm just afraid when people say I would have to pay their expenses too... which is not only unfair, but it scares people like me - with very little money - who can't almost afford even their own lawyers/surveyors. Like someone else in our building who is now selling their flat under market value because they can't afford to pay the fees.

Broadly, there are 2 ways of extending a lease

1. Statutory route
- as Joanthebone seems to be describing. Fees are high - maybe £3k to £5k. The exact cost of the extension and the exact fees are not predictable

2. Informal route
Extension cost can be agreed in advance. Fees should be lower and can be agreed (fixed) in advance.
But you need to know what you are doing. As Joanthebone says, you could end up with a terrible deal otherwise.


Given that your neighbours are your freeholders (so maybe less likely to try to rip you off), I would be very tempted to try the informal route first.

Maybe make them an offer, based on the online calculators (for 90 years added to the lease at zero ground rent) and see what happens.

Janzzz wrote: »

If they refuse our offer - do I have to pay for their own surveyor appraisal?

If it's an informal lease extension - there are no rules whatsoever about what anyone does, or what anyone pays for.

For example, if the freeholder's are 'baddies' they might ask you to pay a valuation fee of £1k and then come back with a valuation of £100k.

Janzzz wrote: »

Because they told us they would accept only their own and we know they the guy is on their site and over valuing the flats in their benefit.

The bottom line is... if you can't agree a price that you're happy with informally, you'll have to go down the statutory route.

Hi again, I started off hoping for an informal agreement, and doing it all myself but the deal the freeholders offered was ridiculous. I don't think they had much idea to be honest! I had a maisonette over commercial property and I don't think the freeholder had any other property so they had no experience of leasehold extension.

It was not the statutory route, my surveyor negotiated an informal agreement for me, he pointed out to the freeholders that the doubling of a new ground rent (They suggested £250 p.a. as far as I can remember) every ten years was ridiculous! My previous ground rent had been £30! I paid no service charges. He also managed to get the get the lease extension cost halved!

If you get a specialist surveyor involved I doubt very much if you will have to go to tribunal, my surveyor told me he rarely had to do that, but if he did start the tribunal procedure, usually the freeholders would then settle rather than go to a tribunal. Going to a tribunal is a final resort, there is a lot of negotiating that can be done first.

My surveyor talked me through all the options and explained everything to me, he was worth every penny in my opinion!

I don't think the freeholders being neighbours would necessarily be in your favour, some of them could be hoping you will sell cheap instead of extending the lease and buy your flat from you at a bargain price... beware! There are so many sharks about!