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We have a leasehold house that we would like to buy the freehold for so we can sell the house. Our agents have got back to us with a rather expensive price, I think they've come to this based on the fact they know we want to sell and the relatively short term left on the lase (84 years).
As I understand it the only way to contest this is to commission a surveyor to come up with their own estimate of the freehold cost and then take them to a tribunal, for which we have to pay all of their legal costs.
I know that the lease term isn't a problem for getting a mortgage, but there are other things involved in the timelines that make it look like it could be an issue for a number of buyers.
I'm also of the understanding that because we pay their legal costs (whatever the outcome) its only worth taking to tribunal if the quote is more than £5k, which it is.
We have a solicitor in mind to act on our behalf, but if anybody has any other advice or experience regarding freehold reversions, or selling houses with short leases, please let me know anything that may be of use.
They have offered to extend the lase but at a cost that makes the freehold more appealing.
read up on here
http://www.lease-advice.org/
most of what you need is there except the yield for the calculation.
I sorted out a lease enfranchisement (similar exercise) for our block of flats and although Im a chartered surveyor it isnt really my field, but I found it fairly straight forward to do myself.
Of out for a while but might be able to help in more detail when I get back later. Esp with the valuation calcs. If you search in the forum over the last few years Im sure Ive put some more info up at some point.
Thanks, I've had a quick scoot around there and I think I'm on the right track. Any recommendations on timescales would be appreciated. Our agents have a reputation for dragging their heels. We have a feeling that the people over the road may be in the same situation so were thinking of having a word with them about combining / sharing legal costs.
Having that short a lease is a huge issue for selling; virtually all lenders won't lend on properties with less than 75 years - so anybody buying your property will have 9 years before they either won't be able to sell or are going to be even more over the barrel than you are.
Selling a freehold property is generally more attractive than a leasehold so personally I'd be firstly trying to get them down a bit and then biting the bullet.
Put it this way; will you get more money for the house when you've bought the freehold = yes. Will you get your money back? Dunno as I don't know the value of your house and what percentage £5kish is.
I work in property although this is a specialist area. There can be a again to be made on buying the freehold and selling on but it tends to only add up on very high end properties, if the value is low the gain doesn’t cover the cost.
You can line it up as an agreement and then do a simultaneous completion so it can be cash neutral as a deal but the fees may be payable ahead of completion so you will need to fund the costs. Unless you have the cash to do it and can take the hit if it doesn’t go to plan then just extend the lease (or line up the agreement to extend the lease) and offer that to the market, it's generally a lot easier to just extend the lease.
I have just this week started the ball rolling on buying the freehold (58 years remaining on lease) on our house. Cost is £4895, house worth around £200k
My brother is a leasehold enfranchisement specialist (at least I think that's what it's called!) and should be able to answer any of your questions.
Try www.tjmlaw.co.uk
Is there as much of an issue with extending a lease? Think ours is under 100 years. It's a council lease if that matters.
My Dad has a house on which the lease has just expired. He tried to renew it, but the landowners dragged their heels. They now want him to pay £80k for the freehold, or chip off somewhere else.