I am buying a Leasehold terraced property which currently has 75 years left on its lease. Would it make sense to buy the Freehold, or is it a waste of money?
If you are looking to sell a Leasehold property with less than 70 years to run then it is possible your buyer’s mortgage company may insist on either the lease term being extended, or that the property is Freehold.
You will, therefore, need to consider the possibility of either buying the Freehold or extending the Lease term once it falls below 65-70 years. Buying the Freehold at an early stage has its benefits as the cost is only likely to increase.
However, before parting with hundreds of pounds, you must appreciate that the only benefit to you will be the saving of a nominal annual payment in ground rent and the ability to insure with a company of your own choice. The benefit, therefore, of buying the Freehold will usually be closely related to the remaining number of years of the Lease term.
Provided you have owned the property for at least two years you are entitled to purchase the Freehold interest as of right under the Leasehold Reform Act 1967, but most freeholders will agree to transfer the Freehold interest without having to follow the strict procedure laid down by that legislation.
You should ask your Freeholder how much it might cost and, if necessary, take the advice of a Surveyor on any quote received.
* Emyr Pierce is Managing Partner of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email law@emyrpierce.co.uk