If you own your a leasehold flat, house, bungalow or a maisonette you have an agreement to occupy your home for a certain number of years paying ground rent but do you realise when the lease ends the freehold landlord gets the property outright?  

                                            

To delay this at present the law gives people in flats and maisonettes a right to have an extra 90 years and the ground rent alters to a peppercorn (zero) and for people in a house or a bungalow you can best improve your lot by buying the freehold so you end up owning the building and the land.


According to Government plans to reform the law if you have a house or bungalow it appears that the valuation methodology to calculate the price of your Freehold will be retained if the press release dated 7th January 2021 is to be followed through. Usually the longer you leave it the worse it gets because the general rule is:


                             the shorter the lease - the higher the price


As the law stands you need to have owned the property for 2 years. If you are administering a deceased estate the deceased needed to have owned it 2 years.


You will need the services of a good solicitor but if you don't already have a solicitor we may be able to recommend one.


Sadly your lease is a wasting asset and as its term reduces so does the value of your flat/house or maisonette. The extent of this is not fully appreciated in the early years because the decrease in value is generally offset by property market increases. However, when you have less than about 70 years it is more difficult to obtain a mortgage - thus difficult to sell, except to cash buyers who usually pay a lot less!


An extension or acquisition of the freehold reverses this process and the full value of the property can be restored to you. This is the main reason people deal with their leases. Remember the longer you leave it to act the more expensive it becomes - unless prices crash in 2021! 


Extending your lease or buying your freehold is therefore important because it will help to restore the value of your home, provide you with more security and hopefully give you more added value than the outlay.


If you want to learn more please contact us.  


For people in flats and maisonettes the Government proposes to make things easier for you but it's not yet been passed through the legislative process.


We have been helping people purchase freeholds for more than 30 years! 


Tony Brunt: 0121 624 8545