Buying the Freehold is it silly or impossible?

by Readers Question

10:02 AM, 7th July 2015
About 6 years ago

Buying the Freehold is it silly or impossible?

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Buying the Freehold is it silly or impossible?

I have come across a block of flats that has 3 of its flats up for sale. I am trying to get hold of the freeholder and negotiate about its freehold as I believe all flats have been sold off on lease and hopefully if the freeholder does agree to its sale as a ground rent investment I can go ahead and purchase those three flats as also being the freeholder if that makes sense.silly

Now am I being silly to think that or will that just be impossible……

Please share your views….

Thanks

Mizanur

Comments

Runju Rahman

21:03 PM, 11th July 2015
About 6 years ago

I wanted to purchase all three flats and the freehold together and but the remaining in time all for a long term investment as they rent out very well.
So i guess there is now way in purchasing all three flats and free hold under my name by itself?
Thats if i do go ahead with it

Puzzler

11:19 AM, 12th July 2015
About 6 years ago

OK I am assuming you need a mortgage to do this?

You can purchase the three flats no problem. The freehold is a problem as the current owner may not want to sell it and even if he does he has to offer it collectively to all the flat owners first. I don't see how you can easily whip it out from under them and buy it wholly yourself. I wouldn't worry about it though, it really has very little value and I am still not sure why you want it. You can still do Right to Manage without owning it.

You can also extend the leases relatively cheaply prior to them reducing to 80 years if this a very long term plan - see other threads on this. Then the freehold is fairly irrelevant.

Runju Rahman

15:34 PM, 12th July 2015
About 6 years ago

Yes that is correct will need a mortgage for this.
Wanted the freehold for service charges and ground rent reasons and maybe sell the block of As a whole later due to high rental demand with rocketing capital growth on the land its sitting on.
but i do understand what you are saying.
Quick question: e.g if a person owns all the flats in a block (lease) how does the freeholder sell it or offer it collectively as i believe now that if your a lease holder you can not be the freeholder?

Puzzler

9:54 AM, 13th July 2015
About 6 years ago

Service charges will be proportionate to work done, you'll still have to pay them, administer them, you won't save anything by owning the freehold. Ground rent is minimal income.

You would have to form a company or buy jointly to make them different legal entities.

You would get most value from just buying the flats. And you might have to wait a long time to get the whole block if there are 7 further flats involved.

Puzzler

15:08 PM, 22nd September 2015
About 6 years ago

As an addendum, I have just found out from my broker that regular B2L lenders will not lend on property where you own more than a certain percentage of the block. They consider their exposure too high. They also won't lend to you for a leasehold property if you own the freehold EVEN AS A LIMITED COMPANY if you are in any way a part of it as this also increases their exposure. You would have to approach a commercial lender.

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