Should I buy the freehold on my house

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    #1

    Should I buy the freehold on my house

    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.
    Tags: freehold, ground rent, lease, leasehold, service charge
    #2
    Everyone seems to be leaving this to someone else. I do not think that I am the best qualified to respond but I am happy to start.

    Are you saying that your ground rent of £105 pa doubles every 10 years?

    If so, 20 x the annual ground rent plus costs appears to be reasonable otherwise it seems to be on the high side and I would make a counter offer. It would be worth enquiring if they would consider a lower amount anyway.

    It is not just a question of whether or not you would recover the cost, you would make the property more marketable and more acceptable to lenders, which cannot be quantified.

    I am not aware of any restrictions on challenging service charges and I see no reason why you could not apply to the FTT if you became the freeholder and remain the recipient of a demand for service charges.


    Comment

      #3
      What is the price you paid for your property ?

      If you compare the asking price of £2100 left in your deposit account at the bank , would you get £105 in annual interest ?

      Make an counter offer at say £1000 and see if any response.

      Check Law Commission website for any indication the price for freehold title on leasehold house may be reduced

      Comment

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