Selling freehold of small block of flats?
12:01 AM, 15th April 2026, 23 hours 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 9 hours 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: 1438 - Articles: 1
10:09 PM, 15th April 2026, About 25 minutes 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: 1438 - Articles: 1
10:12 PM, 15th April 2026, About 22 minutes 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: 69
10:28 PM, 15th April 2026, About 6 minutes 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