Wickerman
17-05-2006, 15:53 PM
Cost to purchase freehold of property / extend freehold
I have a leasehold property (freehold owned by the local council). Property is a traditional 3 bed terraced property.
There is 46 years left on the lease. Property would sell in good condition (as it is) at between 95,000 and 99,999 (at a push). Property is also mortgaged at 85% of 95k.
I am looking to either extend the lease or purchase the freehold interest as time goes by quickly and I could find myself running out of time! I spoke direct with the council a few months ago and the best idea I could get for the total cost of doing so would be "around a few thousand".
However, I have heard seen faxed documentation from the council to the owners solicitor of another property on the same road with approximately the same remaining time on the lease. The value of this property is more like 85k in current condition.
They have attemped to purchase the freehold interest and the figure they have come back with is £20,000 plus legals (4% - £800) and survey (5% - £1000). The property would have been worth this value 5 years ago!!!.
I have done some searching on this and found out about the Leasehold Valuation Tribunal which sounds like it could be of help.
What I would like to ask is (finally :) ) does 20,000 as a freehold value sound reasonable on a house of this value? Also what kind of premium will they put on the value of extending the lease? How would they determine this value and what would happen if the property lease runs down?
Any help on this would be appreciated.
I have a leasehold property (freehold owned by the local council). Property is a traditional 3 bed terraced property.
There is 46 years left on the lease. Property would sell in good condition (as it is) at between 95,000 and 99,999 (at a push). Property is also mortgaged at 85% of 95k.
I am looking to either extend the lease or purchase the freehold interest as time goes by quickly and I could find myself running out of time! I spoke direct with the council a few months ago and the best idea I could get for the total cost of doing so would be "around a few thousand".
However, I have heard seen faxed documentation from the council to the owners solicitor of another property on the same road with approximately the same remaining time on the lease. The value of this property is more like 85k in current condition.
They have attemped to purchase the freehold interest and the figure they have come back with is £20,000 plus legals (4% - £800) and survey (5% - £1000). The property would have been worth this value 5 years ago!!!.
I have done some searching on this and found out about the Leasehold Valuation Tribunal which sounds like it could be of help.
What I would like to ask is (finally :) ) does 20,000 as a freehold value sound reasonable on a house of this value? Also what kind of premium will they put on the value of extending the lease? How would they determine this value and what would happen if the property lease runs down?
Any help on this would be appreciated.