Buying the Freehold to your Flat
You will likely not own the freehold of the flat and instead pay ground rent to the freeholder if you own it. What are the advantages and disadvantages of purchasing the freehold?
Buy the freehold of your property
The landlord/freeholder can sell the freehold to you at any time. If they want to sell the freehold, they must give notice to all leaseholders.
You can’t buy the freehold to your apartment on your own. To qualify, you need to involve your neighbours. To purchase the freehold, you must get at least half the leaseholders together.
You and other occupiers will jointly own the freehold to this building at the end of the process. This can be done by forming an LLC that is owned and controlled the flat owners. Each tenant would retain a long lease, but the new entity will own the freehold. You and your neighbours have control of the new entity.
You can jointly own the freehold and set ground rents together, compare insurance rates, and take control of your destiny. The only cost to you now is legal fees.
Is it possible to buy the freehold of my flat?
The following are the requirements to be eligible for a group leaseholders to purchase the freehold:
The building must contain at least two flats
You can’t use more than 25% of the freehold property for non-residential uses, such as shops or offices.
Leaseholders with long-term leases must own at least two thirds of the flats
Leaseholders who wish to purchase a part of the freehold must own at least half the flats in the building.
You don’t have to have all the tenants on board, but it is necessary to have at least half the flat-owners. If the building has only two flats, both leaseholders must be interested in buying the freehold.
What is the cost of buying a freehold?
Prices for freehold vary just like property prices, but the longer your lease is, the more expensive your freehold. You will need to pay the flat’s portion of your freehold share in order to buy your share.
The purchase price of the freehold
The cost of a surveyor to perform a freehold valuation accurately (so that you don’t pay over the odds).
Legal fees for leaseholders
The freeholders pay legal and valuation fees
Stamp duty land tax (if purchase price exceeds PS125,000)
Benefits of owning the FREEHOLD TO YOUR FLOAT:
Lease extensions are free: You can extend your lease for up to 999 years without any additional cost (except legal fees).
You can control your service costs: you have the option to choose quality providers or value for money
Ground rent is not required: You don’t usually have to pay ground rent
There are fewer conditions: Leases can include a variety of terms. You may need permission to sublet the property or keep a pet.
It can increase the value of your home. Buyers prefer freehold flats to leasehold.