Buying property freehold?

[LeadFarmer]

I pay £5.50/year for my property leasehold, they keep asking if I want to purchase the freehold for £860. It would take me 150 years to break even (assuming current prices). I have about a million years left on it, so other than not having to seek permission for alterations, are there any benefits to buying the freehold?

[AJL308]

LeadFarmer said:

I pay £5.50/year for my property leasehold, they keep asking if I want to purchase the freehold for £860. It would take me 150 years to break even (assuming current prices). I have about a million years left on it, so other than not having to seek permission for alterations, are there any benefits to buying the freehold?

Is there a clause which increases the ground rent in the lease?

[AJL308]

And if you want to do alterations will they charge for the permission?

[bangerhoarder]

It will add a substantial amount to your property value, mortgageability, and ability to sell in the future. At £860 it’s a no-brainer IMO.

[Carbon Sasquatch]

As above - it's not just about you breaking even, it makes the property easier to sell / mortgage.

Maybe try countering with a 100 year multiple ?

[LeadFarmer]

Leasehold isn’t a problem for me when buying a house as long as there are say 150+ years left on the lease. I'm in a desirable area where houses sell instantly so I don’t see selling being a problem should I choose to in the future. No plans to extend but obviously a new buyer might.

Edited by LeadFarmer on Friday 21st October 11:31

[dundarach]

Without knowing anything about anything...seems well worth paying the money to make selling it much easier.

I'd not be buying anything leasehold, but then again I'm a northern chimp so it doesn't come up all that often!

[Whistle]

Ours is also £5.00 per year.

I enquired about buying it and they refused the reason they give was the legal costs on there side would make it unviable.

They always ask me to pay 5 years up front to save them administrative costs.
I pay yearly to piss them off for not selling it to me.

It can’t be increased and has 800 years left on it

[eliot]

i would buy it - less hassle when you sell it, because regardless of what the vendor states if there’s two similar properties i’m going to chose the one that is freehold

[Petrus1983]

£850!!? That’s a no brainier to me as well. Your property will be so much more attractive if you came to sell it, you’ll never wonder if ground rent or lease charges will increase and it’s FREEhold, a million % yours to do with how you want (subject to normal planning).

ETA - out of curiosity what type of property is it? This morning I went to see the property I was buying which was freehold - but have now been told it would have to go back to leasehold as there’s another flat that makes up the building.

Edited by Petrus1983 on Friday 28th January 14:51

[JP__FOX]

To be honest, I wouldn't even consider buying a leasehold house, no matter the price... so I'd say £860 would open your market up considerably for when you did sell. It may be a sellers market atm but it won't always be like that.

[Vasco]

JP__FOX said:

To be honest, I wouldn't even consider buying a leasehold house, no matter the price... so I'd say £860 would open your market up considerably for when you did sell. It may be a sellers market atm but it won't always be like that.

Quite.

I always ignore leasehold properties, too much potential hassle.

[98elise]

bangerhoarder said:

It will add a substantial amount to your property value, mortgageability, and ability to sell in the future. At £860 it’s a no-brainer IMO.

Agreed. Sounds like a bargain and would make a property much more desirable.

[Chicken Chaser]

These peppercorn rent leaseholds are exactly that. They never increase and you can sure that it's just going to stay like that for the duration (999 years)

I bought mine a couple of years ago because I wanted to develop without consultation of the management company.

Oddly I now own the freehold title but there is still a leasehold title on the house. I didn't get a conveyancer to sort it so that will have to be sorted on sale. I think it means that I'm now the management company of my own house so will need to be combined at some point.

[DanL]

LeadFarmer said:

I pay £5.50/year for my property leasehold, they keep asking if I want to purchase the freehold for £860. It would take me 150 years to break even (assuming current prices). I have about a million years left on it, so other than not having to seek permission for alterations, are there any benefits to buying the freehold?

House or a flat? No brainer if it’s a house, might need a bit more thought if you’re one of several people sharing the overall building fabric…

[carbonblack]

I agree with people also suggesting to buy it and that's it's a no brainer.

It's one less party to rely on when buying/selling, one less unknown and like others have said, I wouldn't entertain buying a leasehold house.

+1 - no brainer.

[Chicken Chaser]

What I would add is you could likely get it cheaper than what they've offered. You could go back with a lowball offer (look on Google as to what the leasehold tribunal would say was a reasonable calculation) because paid around 1/2 of what price they offered it to me.

[LooneyTunes]

Vasco said:

JP__FOX said:

To be honest, I wouldn't even consider buying a leasehold house, no matter the price... so I'd say £860 would open your market up considerably for when you did sell. It may be a sellers market atm but it won't always be like that.

Quite.

I always ignore leasehold properties, too much potential hassle.

By and large the historic long leases aren’t any hassle at all (I’ve owned one before and would buy another).

That said, I’d still be buying the freehold as bringing in those extra buyers could see the price bumped up when he eventually comes to sell. If that translates to an extra £5k+ it’s a petty solid return.

[anonymous-user]

Absolute no brainier (If it's a house)

I would snap their hand off.

Vasco said:

JP__FOX said:

To be honest, I wouldn't even consider buying a leasehold house, no matter the price... so I'd say £860 would open your market up considerably for when you did sell. It may be a sellers market atm but it won't always be like that.

Quite.

I always ignore leasehold properties, too much potential hassle.

Many buyers ignore leasehold houses as they have had so much bad press over the years, and rightly so in some cases.

As I said, absolute no brainer. I would be fighting to sign the paperwork as quickly as I could in case they changed their minds

Edited by anonymous-user on Friday 28th January 17:03

[anonymous-user]

As someone who works in the mortgage industry and has to deal with the mess these create on a daily basis, absolutely I'd buy it.