If your home has been sold to you on a leasehold basis, you may be wondering how you can go about buying the freehold, or whether that’s even a possibility.
Many homeowners are happy to buy on leasehold terms, but some may want more control over their property. If you’re thinking about buying the freehold of your property, here’s how to do so with fewer complications.
Related: How to sell a leasehold property
Check you are eligible
Buying a freehold comes with a number of requirements you’ll need to meet. For example, the building must contain at least two flats and no more than a quarter of it can be used for purposes that aren’t solely residential.
Speak to your neighbours
If your home is a flat, it’s important to talk to your fellow residents first, as at least half of the flats in the building will need to be interested in buying the freehold with you.
If you’re all currently grappling with high-ground rents or your freeholder has chosen expensive services for the building, it might be relatively easy to get people on board with your suggestion.
Find out the cost of the freehold
The most important step is finding out how much buying the freehold is going to cost you. Freehold prices vary as much as property prices do, so you will need a surveyor to determine the market value of your freehold.
This valuation forms the basis for the negotiation process. One rule of thumb is that the shorter your lease, the more expensive the freehold will be – but solid legal advice is a must.
Consider other costs
Buying the freehold comes with additional expenses too, including valuation fees, legal fees, and valuation costs for the freeholder. It's essential to budget for these costs and consider the long-term benefits.
Related: Fees when buying a house
Work out your finances
Once you’ve found out how much the freehold is going to cost, you’ll need to make sure you can feasibly afford it. Most lenders will extend your mortgage to allow you to buy the freehold, but it’s important to speak to a mortgage broker as soon as possible to find out if this is a possibility.
Get a solicitor
When it comes to buying a freehold, expert advice is essential. Not every solicitor will have experience in freehold purchases, so shop around for one that specialises in this field. Your local Parkers agent will be able to help you with this.
Sign a participation agreement
The first thing your solicitor should do is draw up a participation agreement for everyone involved in the purchase of the freehold. If someone drops out last minute, this will increase your costs or the sale could fall through.
A participation agreement is a contract between all leaseholders who are purchasing the freehold, outlining all matters and terms between participants.
Buying the freehold of your house
Buying the freehold to your house is also possible and may be more straightforward than buying for a flat as you can act alone rather than having to convince others.
However, your freeholder may not want you to buy it and therefore you’ll need to enlist the services of an experienced solicitor, get a valuation, and seek out legal advice.
Contact your local Parker’s branch to start up your property journey