|Ian Parkin||16/10/2019 12:36:31|
806 forum posts
Out of the blue a letter has arrived from my freeholder suggesting that they want to sell the freehold.
they quote a total price of £2500
plus my legal fees presumably.
My ground rent is £6.20 and it has 840 years left
Is it worth me buying it?
Edited By Ian Parkin on 16/10/2019 12:37:34
|Andy Carruthers||16/10/2019 13:11:47|
279 forum posts
Owning your freehold makes property sale easier - one less "thing" to deal with - so long as the asking price is a very low proportion of the current house valuation
Also removes any ad-hoc maintenance charges which the leaseholder may choose to implement, the risk is the owner may offload the leasehold to another party who may choose to monetise the asset
On balance, I would take the offer to remove both future uncertainty and simplify future property sale
|1004 forum posts|
Agree with Andy, grab the opportunity which will give you full control over the property. Means that you can get repairs carried out at a price chosen by you, not exorbitant maintenance charges. Also alterations to suit you but maybe subject to planning law.
Great chance for your future. Sorry, cannot advise on the cost quoted but if it was me, I'd be inclined to take up the offer
Very good luck,
1116 forum posts
Ian, I would suggest that it depends on whether you ever plan to sell the house in the future, or say build an extension, or anything else which would need notification to the lease owner.
This again would depend on who would end up as the new lease owner should you not buy it yourself.
Jeffrey Shaw of Nether Edge Law is the local expert in Sheffield, which has a rather different arrangement on leases to other parts of the UK; please be careful from whom you accept advice on this forum.
He has a reputation of being a tad abrasive, even to clients, but is apparently the best in the city, specifically for Sheffield leases.
You could do worse than having a look at this Google review. (not a review of Mr Shaw I should stress)
PM me with a phone number by all means for further discussion, if you've lost the card I gave you on my visit to collect the blast cabinet, or just give me a bell.
p.s. the two previous posters got in whilst i was typing a linger reply, but it seems we concur in this case.
Edited By peak4 on 16/10/2019 13:34:22
|Mick B1||16/10/2019 14:04:57|
|1611 forum posts|
The offer means the freeholder intends to sell anyway.
Your relationship with them may be OK, ground rent and any service charge reasonable, but there's a lot of recent gossip in the media about huge hikes in service charges and other abuses that make leasehold a risk-prone game however many years there might be left.
We bought a house near Brum about 30 years ago on leasehold. The freeholder died as we were moving in, and the freehold got sold on twice before we were able to track it down, and fortunately we could buy it because the previous leaseholders had transferred their right to us.
At that price, unless the house has major issues that compromise its value, I'd say jump at it - there are several possible ways you might come to regret it if you don't.
2691 forum posts
Taking into account all of the above comments... the property, & the land it stands on become yours, go for it.
|Former Member||16/10/2019 14:43:39|
|1329 forum posts|
[This posting has been removed]
940 forum posts
There has been much in the press about the selling of new houses by developers as leasehold properties and then selling the leases on to companies whose only purpose in life is to acquire leases and then jack up the charges to as high as they can “legally”. If I found myself in your position then I wouldn’t hesitate for to acquire the lease, you never know who could end up with it in the future and how much financial grief that could cause for you. In the end only you can make the decision once you aware of all the circumstances, good luck.
|duncan webster||16/10/2019 15:38:02|
2651 forum posts
This all gets very complicated. If your lease is like mine, the reside of 999 years, then my solicitor tells me that they can't increase the ground rent, and they can't levy any charges apart from if you want to build an extension. If you already have an extension without the freeholders permission and you try to sell then you can get an outrageous demand, as my neighbours found out.
Having said that, owning the freehold is better. I'd get hold of your solicitor and make them an offer of a lot less, say £!000. They have declared an interest in selling, and in terms of an investment it can't be worth more than say 10 times the ground rent, pkus legal fees. If you have neighbours who have the same freeholder it might be worth getting together to share legal costs. Solicitor won't like it, they would prefer to charge several people for the same work.
|Mick B1||16/10/2019 16:03:30|
|1611 forum posts|
That might work, but I've heard cases where they offer sale of freehold once (as I think they may be required to), then sell to a specialist company if rejected. Even if the specialist company offers them a much lower price per freehold, if the current holder's got a number of them to sell it can enable much quicker and simpler realisation of the assets. It might pay for you/conveyancer/solicitor to find out about the circumstances of seller and sale - if you can.
You have to assume that if you don't buy it, he'll sell it elsewhere, and your control will go with it.
Edited By Mick B1 on 16/10/2019 16:06:38
|Ian Parkin||16/10/2019 16:10:09|
806 forum posts
my opinion was much as Duncans
they can’t increase GR
they cant impose any new terms which have been zero in the last 31 years re maintenance or extension building
so if I spend another 20 years here I’m into £ 120 for the gr in that time scale rather than £3.5k with legal fees
|1750 forum posts|
I assume the property is in the north of England and that there are no intervening leaseholds ie it's just a case of your long lease and the freehold.
The first thing to do is to read the terms of the lease carefully and then decide whether buying in the freehold would be advantageous.
If the property is registered then the transfer of the freehold is straightforward.
|Bob Mc||16/10/2019 17:11:02|
|150 forum posts|
Yes I have just had a similar letter to purchase the leasehold.
I find it difficult to talk about this without feeling a distinct anger at being completely at the mercy of unscrupulous individuals who appear to take great delight in making a living out of what I consider to be legalised crime; an article in the Guardian ..."Leasehold houses and the Ground Rent Scandal" two years ago may give some hope that there could be a shake up of these Feudal laws some time in the future.
What annoys me is that these people seem to be able to put out prices for purchase of the leasehold which is based on the maximum of how much they can legally claim, they have no interest in providing any services whatever apart from making money .
Some time ago we were sent a letter from our Leaseholder indicating that we had to use their Insurance company to insure the property, the letter was written in a way that seemed to make it a legal requirement, and some householders were taken in by it and bought their inflated insurance policies.
At another time they sent a letter stating that THEY own the property and can enter the property at any timeTHEY deem reasonable, this was as I understand it not a legal condition and they had to retract the statement.
I understand that in Scotland Ground Rents have been abolished, but I do not know the details, I have written to my MP about the situation regarding English ground rents (some 8 years ago), and was told that there were no plans whatever to alter leaseholders rights.
The article in the Guardian says that a leaseholder was charged £2500 just for permission for a conservatory to be built, this is apart from Council planning permission which to my mind sums up leaseholders corrupt attitude.
I don't know if the article in Guardian which at the end states that the Government has proposed a ban on the future sale of houses as leasehold...and...As well as cutting ground rents to zero.. does this actually mean that my ground rent will eventually be free..?
Which magazine stated (2018) that a Government proposal to cap ground rents to £10 a year was being discussed, I haven't heard anything more about this, perhaps it might be an idea to wait and see if there will be any further moves in the right direction.... will have to look into it a bit more.
|Bob Mc||16/10/2019 17:22:55|
|150 forum posts|
...Further to my last post...
There is a YouTube parliamentary discussion...see Progress on Leasehold and Commonhold Reform.. could it be that leaseholders are now trying to claw in as much as they can before legislation gets to them.
|Martin of Wick||16/10/2019 18:54:47|
|196 forum posts|
Understand your lease. If it one of the old 19c land leases that were bundled up into packages for sale to punters as a form of income, under current law the current owners of the lease have very little power - there may be covenants in the lease, but they usually unenforceable if deemed unreasonable (restrictions beyond the grave type arguments)
The issue with this type of lease is the lease owners have not been able to raise the ground rent by law. BUT that does not mean there haven't been attempts to get the current law overturned in the past and wouldn't try in future (although you can insure yourself against that risk).
Given the issues with modern leases on new estates, it is getting difficult to sell any type of leasehold house - all the punter hears is ' lease' without understanding the type of lease or the issues involved. Generally better to purchase the lease and convert the property to freehold if it can be done at a sensible price. In theory, the value of this type of lease should be negotiable between 10 and 50 times the ground rent. Supposedly, these type of leases were to be killed off by legislation by 2020 / 2021 along with chancel liabilities etc. Given the demonstrable lack of performance of our elected members, your lease will probably run out before that happens.
Ensure the person purporting to own the lease is the actual owner (have they registered it with the LR in their name) if not can they demonstrate their title to the satisfaction of a solicitor experience in land law and the Land Registry (easy to check using Land registry). In some cases, the purported owner does not have critical documentation and is not always able to prove title. In that case all bets are off unless the title holder can be located.
If you wish to proceed, take advice from and use an experienced solicitor which will double your costs, but you will have to weigh that against any benefit of converting the property to freehold.
|Dave Halford||16/10/2019 19:05:09|
|803 forum posts|
I think this below says it all, no leasehold property is worth the same as an identical freehold one.
|vintage engineer||16/10/2019 19:10:22|
254 forum posts
Buy it or someone else might buy it and impose charges on you!
|194 forum posts|
I have about 800 years left on my leasehold property which costs me £6 per year, I enquired about buying the freehold but my solicitor said that there would be covenants left on the land which will mean that I would still have to pay for any extensions etc. so it would'nt be worth it as the leaseholder would probably charge around £30000 to lift them, otherwise it would be freehold in name only
|Bill Phinn||16/10/2019 20:26:56|
|335 forum posts|
Ian, can you reassure me that the company collecting the ground rent and making you the offer is not Simarc Properties Ltd?
|Ian Parkin||16/10/2019 20:53:08|
806 forum posts
its the church actually
They say if i dont buy within a month they will assume i dont want to and then put it on the open market
next question...... Why would some company want to buy it ?
Surely not for the privilidge of invoicing me for £6 every year
This cant go up for 800~+ years
Theres no covenents saying I have to ask to do anything to the said house
Its in a conservation area so not much scope fro extending
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