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What are the Benefits of Buying Your Freehold?

As a leasholder,  purchasing your freehold is a bit like future proofing your asset, because if the remaining time on the lease is shorter than 80 years, your property will steadily become less valuable.

The main benefits are:

1. There's no ground rent to pay

-As you are responsible for the land, you will stop having to pay ground rent.

-When you buy the freehold, there is no lease to worry about. There will be a formal legal transfer and you will require a solicitor to do this.  The title of the property will be registered in your name as part of this process.

2. You will add more value to your property

-Mortgage lenders and buyers are very reluctant to be involved with a property that has a short-term lease. Many lenders will not give a mortgage on a lease with 75 years or less left. By owning the freehold, you are making the property more attractive financially.

 

The process of purchasing a freehold can be a complex and drawn out process. At Banner Jones, we've helped many leaseholders take control of their own home, with our hassle-free and easy to understand approach. For more information, call our specialised team today on  0330 017 6309.

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Why do leases need extending?

Owning a leasehold house or flat means owning a lease of the property, which has a finite term of years.  Most leases on such properties are granted for 99 years or 125 years, and many will now have less than 80 years to run.  Without an extension to the lease you may reach the point where most mortgage lenders will refuse to lend money to a buyer, leaving you with a property that you cannot sell.  If you need to check how long is left on your lease we can assist with this.

Do I just ask my freeholder for a lease extension?

You can and this is what we call an “informal purchase”.  The problem with this method is that the freeholder is allowed to dictate the terms. We would therefore usually advise our clients to take professional advice from a specialist valuer before agreeing terms.  We work with specialist valuers and can offer this as part of our leasehold conveyancing service.

If you have already been successful in reaching an agreement with your Freeholder then we can help you complete the deal or continue negotiations where necessary, before arranging the tranfer of the property into your name at the Land Registry.

Is there a formal procedure?

There are certain criteria which need to applied before the process can begin, the most important one being that you must have owned the property for at least two years. 

The procedure begins by serving a formal notice on your freeholder.  Within a certain time limit, the freeholder should respond with a counter-notice and negotiations then commence in order to agree the price.   At Banner Jones our Leasehold Conveyancing team can assist with the whole process, including negotiations with the freeholder.  We already have contacts with most of the main freeholders in our region, so it is often easier for us to do this for you.

If the price cannot be agreed by negotiating, an application to the Property Chamber of the First-tier Tribunal will be needed. Again, we can manage this for you as part of the process.

What if my freeholder just ignores my notice?

We can help you to make an application to the County Court for an order to sell.  The freeholder must implement the terms of this order and if they do not, a further application is made to actually grant the new lease.  This result is very rare as ultimately the freeholder cannot stop you exercising your right to buy.  From their perspective, it is better to respond to your notice and therefore remain involved in the process.

Selling after a freehold purchase

Once the transfer into your name has been completed and you become the freeholder,  we can assist with the onward sale of the property for you in the usual way.

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