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  • FIRST POST
    • Marcosc92
    • By Marcosc92 9th Nov 18, 5:16 PM
    • 2Posts
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    Marcosc92
    Should i buy the freehold on my house
    • #1
    • 9th Nov 18, 5:16 PM
    Should i buy the freehold on my house 9th Nov 18 at 5:16 PM
    I currently live in a new build house which i have been in for almost 3 years. When i bought the house it was sold to us as leasehold.
    I have read a lot in the news about the leasehold scandal which is going on about ground rents doubling every ten years causing leasehold house un-sellable.
    Recently i have been in touch with the builder of the site and asked if it was possible for me to purchase the freehold which they have agreed for a price of 2100 plus 180 legal fees, plus 400 for my solicitors fees.
    We our thinking about selling our house in the next 3-5 years and are worried that if we buy the freehold we wont get any of the money back we spent on it when selling.
    Our ground rent is 105 per year and there is 997 years left on the lease.

    I was wondering if anybody could give me some advice on whether its worth purchasing the freehold or leaving it as a leasehold?

    We also pay service charge for upkeep of the estate we live on, i have read that once you become a freeholder of a property, you have less rights when it comes to service charge price increases.

    I would appreciate feedback.
Page 1
    • HampshireH
    • By HampshireH 9th Nov 18, 5:39 PM
    • 1,046 Posts
    • 1,204 Thanks
    HampshireH
    • #2
    • 9th Nov 18, 5:39 PM
    • #2
    • 9th Nov 18, 5:39 PM
    I would always choose freehold over leasehold. As a buyer the freehold would be more attractive. However I think that viewpoint really depends on location. Where I am there are very few leasehold houses and they don't sell anywhere near as quickly as freehold properties.

    Further north its more common and therefore not so much of a resale issue.
    • Tom99
    • By Tom99 9th Nov 18, 5:52 PM
    • 2,986 Posts
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    Tom99
    • #3
    • 9th Nov 18, 5:52 PM
    • #3
    • 9th Nov 18, 5:52 PM
    2,100 is exactly 105pa valued at a discount rate of 5%.
    That's not too bad, it could be worse, and if 180 is the freeholders total costs that you are paying that's very cheap.
    You might get it cheaper than 2,100 if you exercised a statutory right to buy the freehold but I expect the costs would be a lot higher that 580.
    You might get a better deal if you wait for the proposed leasehold reform legislation but I doubt any saving would be that great.
    Its impossible to say whether it will add 2,680 to the value of your house as that is probably quite a small percentage of it value.
    However given the press outcry about leasehold houses if, when you come to sell, your competition is a similar house which is freehold for a little more money, which would you choose?
    • AdrianC
    • By AdrianC 9th Nov 18, 5:59 PM
    • 19,061 Posts
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    AdrianC
    • #4
    • 9th Nov 18, 5:59 PM
    • #4
    • 9th Nov 18, 5:59 PM
    I have read a lot in the news about the leasehold scandal which is going on about ground rents doubling every ten years causing leasehold house un-sellable.
    Originally posted by Marcosc92
    The issue there is the doubling clause, not the lease.


    Recently i have been in touch with the builder of the site and asked if it was possible for me to purchase the freehold which they have agreed for a price of 2100 plus 180 legal fees, plus 400 for my solicitors fees.
    We our thinking about selling our house in the next 3-5 years and are worried that if we buy the freehold we wont get any of the money back we spent on it when selling.
    2,680 is neither here nor there in the grand scheme of a house sale. It's the kind of figure that quickly gets waved around in negotiating.


    Perhaps a better question to ask is whether it will make the property easier to sell?
    The answer to that has to be that it cannot make it worse. At the minimum, it's going to be neutral. But I'd hazard a guess that the likelihood is that it will help.


    Our ground rent is 105 per year and there is 997 years left on the lease.
    No problem on the duration. Perhaps the more important question is what increase amount/frequency is specified in your lease?



    We also pay service charge for upkeep of the estate we live on, i have read that once you become a freeholder of a property, you have less rights when it comes to service charge price increases.
    Can't see it making much difference at all. The freehold you are buying is for YOUR plot, and your plot alone. You are still obligated to contribute to the estate maintenance, and you are still one of quite a large number (I suspect) of people doing so.
    • D_M_E
    • By D_M_E 9th Nov 18, 6:15 PM
    • 1,966 Posts
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    D_M_E
    • #5
    • 9th Nov 18, 6:15 PM
    • #5
    • 9th Nov 18, 6:15 PM
    For a new build property only 3 years old, that price seems cheap.

    Wait until the freehold is sold to some investment company and the price is likely to shoot up to possibly around 30,000 or so plus another 5000 in fees.

    My choice would be to buy it now at the price offered if I had the funds available.
    • ProDave
    • By ProDave 9th Nov 18, 7:03 PM
    • 1,116 Posts
    • 1,352 Thanks
    ProDave
    • #6
    • 9th Nov 18, 7:03 PM
    • #6
    • 9th Nov 18, 7:03 PM
    At that price I would buy it. Then again I would never have bought it as leasehold.

    It might not add much to the value, but it WILL increase the number of prospective buyers as there must be lots like me that would never buy a leasehold house.
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