Buying freehold of my house?

[aclivity]

Every year, around the end of January I think about buying the freehold - because I have to send off my cheque for £50 for my ground rent to the freeholder.

According to this link I have to make an offer rather than asking the freeholder what they would accept; is there any easy way to determine what the offer should be (like, is it 5 years worth of ground rent, or something straightforward?). The lease is the remainder of a 999 year lease from 1987, or something like that, so there is no concern that we will be evicted from the property!

Other than saving us £50 a year, what are the benefits of buying the freehold? Are there any drawbacks, other than the cost?

Thanks in advance

Andy

[rog007]

To get an informal value either speak to a local land agent specialist or just ask the Freeholder what he values it at (you'd obviously be declaring your interest at this point). You never know, he/she might be glad of the interest and could do with some money! Otherwise go the formal (right to buy) route and the price will be determined by a expert panel. I would first of all however seek out a specialist lawyer to guide me as, although things have been made much easier over the years, it can still be a bit of a minefield. Good luck!

[REESER]

I have the exact same dilema on my house as the OP has. I too would be interested in any info, but as stated I think solicitor or specialist in this field would be first port of call.

[ojo]

It should cost you about £1,000 + fees - if your landlord wants to sell !

[apguy]

Freeholds typically come up for sale at auction. (Allsop's sell a few) The way they work out the guide price is to work out the ground rent as the % return on investment.

So as an example:

A freehold generating £100 ground rent a year which sells for £2,000 is generating a gross yield of 5%

This should assist you in working out a value - as most freeholds for sale via auction look to achieve 4-5% grosss yield.

[jamescodriver]

Assuming the OP is in a house in England/Wales there is an agreed but complicated formula for working out the purchase price of his freehold. This is mostly defined by the ground rent payable and the term of the lease.

Basically there will be a sliding scale with the shorter the lease the higher the price of the freehold. (Indirectly involved in one with 7 years left which cost £40k (House was worth £80k) however if you are in a newish build with maybe a 125 year lease and 120 years to go it will be around £2500.

I would suggest you seek out a good Chartered Surveyor as much as a solicitor.

Bear in mind you will also have to pay the other sides costs as well...

[R1 Loon]

I was quoted £85,000 by the other side when I enquired (and offered what I thought was reasonable) about buying my freehold, I decided to let them keep it and keep stumping up my £45 a year instead.