Freehold purchase cost

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    Freehold purchase cost

    Hi,

    I recently purchased a leasehold house in West Yorkshire. The lease is for a duration of 700 years, of which more than 600 years are still remaining. After I bought the house, I sent a letter to the freeholder and informed them that I am the new owner, and also asked him to send me invoices for any ground rent to be paid in future. The freeholder did not respond for a long time, then after a year or so, I received a letter stating that they would be willing to make me an offer to buy the freehold rights. The price that they have quoted is £2500. Considering the fact that the ground rent is only £5.00 a year, I think the price that they quoted is too high.

    Does anyone know if there is any legally prescribed formula for calculating the freehold price for a house?

    Also, what would be a good price that I can offer the freeholder which is not "unreasonable" for them to consider?


    #2
    Does that include their legal costs? If so, it may be reasonable.

    Comment


      #3
      The offer letter says "£2500 subject to contract" so I am not sure if there are additional costs involved.

      But some of the articles I have read online seem to indicate that the offer price of the freehold is too high.

      Comment


        #4
        It is too high if it is just the premium, but may be reasonable if it is the total cost. The seller will not want to bear their own legal costs, given the advantage is almost all yours.

        Most of the articles will simply be using net current value on the ground rent, and not including legal costs. (The value of the reversion will be small.)

        Comment


          #5
          Make an offer of £100 for the freehold title plus £600 contribution towards legal costs

          https://decisions.lease-advice.org//...1-1000/983.pdf


          Case Reference : Property : Applicants : Respondents :

          Type of : Application FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) MAN/00CG/OC6/2016/0005

          Comment


            #6
            Gordon999,

            That article is very useful - thanks for posting it on the forum

            Comment

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