Selling freehold of small block of flats?
12:01 AM, 15th April 2026, 3 weeks ago
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I own the freehold of a small block of flats. I also owned all of the leasehold flats (jointly with another), which we sold in the last couple of years.
I now intend to dispose of the freehold and will, of course, offer it to the leaseholders as required. If the leaseholders do not wish to purchase the freehold, however, I understand it cannot subsequently be sold for less than it was offered to them.
So naturally, I’d like to have a formal offer from a willing buyer that I can use for the statutory first-refusal procedure as a reference. I’m aware I can get a surveyor to provide a freehold valuation, but that seems a less good option, given it’s not backed by actual intent to purchase at that value, which could trip me up down the road selling on the open market if the price is set too high.
I am not looking to maximise profit, I’m happy to pass the freehold onto the leaseholders for a lower end of fair market value, but I want to make sure I have viable options should they simply not wish, or agree to, purchase. I’d much value recommendations as to how to proceed and what institutional buyers I can approach that may be a good fit and are likely to engage?
Thank you in advance,
Gabriela
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Member Since December 2015 - Comments: 79
1:11 PM, 15th April 2026, About 3 weeks ago
Reply to the comment left by Tim Peters at 15/04/2026 – 12:53
Let’s agree to disagree as to how present value of future cash flows is calculated. Ground rent is collected on annual basis for the entire period of the lease, so saying that £250 will be worth nothing in 100 years is true, but irrelevant.
I think you are also answering two different people with different circumstances.
My (OP) question is quite specific as to what I asked about, and it’s not about valuation itself, so I’ll appreciate anyone with useful feedback on that to share their knowledge.
Member Since January 2015 - Comments: 1457 - Articles: 1
10:09 PM, 15th April 2026, About 3 weeks ago
Reply to the comment left by Helen at 15/04/2026 – 11:19
Why would anyone want to purchase 2/3 of a freehold?
Member Since January 2015 - Comments: 1457 - Articles: 1
10:12 PM, 15th April 2026, About 3 weeks ago
Surely you have had a formal valuation carried out for insurance purposes?
The costs of the valuation of the freehold are tax deductible, so more sensible to do it properly and get a realistic not inflated valuation to offer to the leaseholders.
Member Since October 2023 - Comments: 73
10:28 PM, 15th April 2026, About 3 weeks ago
Reply to the comment left by Judith Wordsworth at 15/04/2026 – 22:12
I don’t think an insurance valuation would help. We have one building insured at £5.2M which was its independently valued reinstatement cost, even though the market value of all the flats in it would only be £1.4M on a good day.
Freehold value is more about discounted cash flows and residual value. Then factor in the uncertainty of leasehold reform. Ironically as interest rates rise, the value of the freehold goes down.
If I have £100k in a stock market tracker I might make £8k/year. Even in a bank I could get close to £5k
The same £100k buying a freehold is unlikely to generate that much in ground rent so you have to look at future cash flows and compare that ROI to other asset classes
Member Since April 2024 - Comments: 32
1:51 PM, 16th April 2026, About 3 weeks ago
Reply to the comment left by Binks at 15/04/2026 – 12:16
Try ground-rent.co.uk or groundrentfund.co.uk. Just found them with a google search. Or freehold-sale.co.uk
Member Since October 2022 - Comments: 414
2:11 PM, 16th April 2026, About 3 weeks ago
Replying to previous post regarding buying 2/3rds of the freehold.
The freehold of the building and the land it stands on has a class of title registered at HMLR, if it’s not registered ie no title, then HMLR recognises the original conveyance and deeds.
You can’t purchase 2/3rds of a freehold. The seller has to divide the land by boundary into 3 and each registered as a separate freehold with its own title number and boundary plan which is required to get a mortgage unless freehold split into separate leaseholds with own titles
Member Since January 2015 - Comments: 1457 - Articles: 1
9:49 AM, 18th April 2026, About 3 weeks ago
Reply to the comment left by Tim Peters at 15/04/2026 – 22:28
These days it’s the land value that’s more important I think than the value of the leasehold flats.
Member Since October 2023 - Comments: 73
10:12 AM, 18th April 2026, About 3 weeks ago
Reply to the comment left by Judith Wordsworth at 18/04/2026 – 09:49
That may be true but now that leaseholders have a right to extend their leases to 999 years, the land value is worthless. No investor will wait 1,000 years to get a return
Member Since July 2013 - Comments: 1266 - Articles: 1
12:55 PM, 19th April 2026, About 2 weeks ago
Reply to the comment left by Helen at 15/04/2026 – 11:19
You plan to sell your flat with one share of freehold and the other two shares of freehold separately? No-one is going to buy a share of a freehold with so many other parties involved. Either sell one each to the other leaseholders or all of it to a single freeholder. Probably by auction.
Member Since July 2013 - Comments: 1266 - Articles: 1
1:02 PM, 19th April 2026, About 2 weeks ago
How long is the lease?