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Sep, 2014

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  1. #1

    Default Collective enfranchisement-79 yrs. unexpired- cost?

    I am a long leaseholder of a flat which is one of a block of four. the freeholder has indicated in the past that he is willing to sell freehold. another leaseholder agreed a figure 2 yrs ago but it never went ahead. I have approached other leaseholders and 2 have agreed to try to purchase freehold with me. if freeholder is still willing, we would like to know how much to offer. we are hoping to avoid LVT route and associated costs.
    could someone please explain the calculation for me? please show calculation in case any variables need adjusting (eg. current market value)
    many thanks.

    lease is 99 yrs from dec 1987. ground rent is £50 first 33yrs, £100 next 33yrs and £200 last 33 yrs. I assume other flats are same. market value of each flat is about £75000. block is in kent.

  2. #2
    Join Date
    Dec 2006
    Posts
    1,101

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    I will do you a nice 4 page spreadsheet where you can change the value of the variables (ie market price of freehold, relativity, discount rate for income and discount rate for deferment) and see instantly the result. I will do it for £10 with the chq made payable to "Children in Need". Send me a personal e-mail and I will show you the sort of thing you can expect for the money.

    The value of the freehold if you went under the Act would be around £10,000 assuming Cadogan and Sportilli applied. If there is a sucessful appeal the value could drop back to £8,000 if 6% for the deferemnt was used

  3. #3

    Default

    sgclacey, thanks for the valuation. it seems a lot higher than we anticipated, based on other limited info we could find. can you briefly explain how you calculated it please .[ I am not sure the spreadsheet would be of use if we dont know how to use it].

    thanks.

  4. #4
    Join Date
    Dec 2006
    Posts
    1,101

    Default

    The ground rent is £200 per annum in total. This when capitilised at 7.5% assuming it may rise after 33 years ie in about 13 years time would be worth around £3,000.

    The discounted value of the reversion. The total value of teh flats is £300k. If this is discounted back at 5% this would give a figure of £6,355.

    There would be very little if any marriage value particularly as theproperties have only just gone below 80 years and are outside London.

    Add the two figures together and you £9,355

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