Buying a freehold

[Chicken Chaser]

I'm interested in buying the freehold to my property which is a semi detached house. It has 944 years to run on the lease for which I pay £9 for per year. Im confused as to what mechanism I should use to calculate a rate which I consider suitable to make an offer? Anyone else done this with some good pointers?

[NickCQ]

Cadogan v Sportelli established a 5% discount rate for houses

http://www.cluttons.com/sites/default/files/Deferm...

[Moominho]

If it's only 9 quid a year, and for 994 years, is it worth it?

I've seen leasehold houses of that ilk in garden cities, or historical areas etc, and in the whole buying the freehold isn't really necessary.

[Chicken Chaser]

I want to extend and by the time i've paid the legal fees to sort out the freeholder in all of it, I might as well go some way and pay for the freehold myself so I dont have a 3rd party involved.

[NickCQ]

Chicken Chaser said:

I want to extend and by the time i've paid the legal fees to sort out the freeholder in all of it, I might as well go some way and pay for the freehold myself so I dont have a 3rd party involved.

If it's 944 years, why do you want to extend? Or is it 94?

[tight fart]

I'm guessing he wants to extend the building?

[NickCQ]

tight fart said:

I'm guessing he wants to extend the building?

Aaaaah my mistake. Thought he meant extend the lease!

[Chicken Chaser]

Yes, a house extension.

[GlenMH]

It depends who owns it. There are now companies that own 000's of leases and make their money by granting permissions and inflated sales prices.

Ours cost £1300 for an 880ish year lease at £2.50/year ground rent ie massively more money than it was worth. But as we had major works planned, it was worth every penny for the peace of mind.

[Chicken Chaser]

Wow, that does seem high. My neighbour managed to buy his (same as mine at £9 p/m) for £650. I'm tempted to try lower.

[GlenMH]

Chicken Chaser said:

Wow, that does seem high.

It was 40% off their original quote

[Chicken Chaser]

I'll try and negotiate informally rather than going down a formal route as per the Leasehold Reform Act but may reference it in correspondence
Although they can simply quote their price and play hardball, i'm trying to find a reasonable yield rate to apply. It does seem that recent tribunals are applying a 6% yield which comes out at about 16 years of ground rent equivalent to value the freehold. Whats harder to calculate, is the cost of a reasonable legal fee!

[Matt p]

Give these people a try.

http://www.leaseholdsolutions.com they should be able to offer some advice.

Be thankful that it's not one of the very big multi freehold owners that own the freehold as it's a pure money spinner for them.