In our FAQ series we look at the very common problem of people who have leaseholds that are running out.
Q: We have bought a leasehold house but have read that we may struggle to re-mortgage the property as there is only about 70 years left on the lease. Should we think about buying the freehold?
A: Yes, what you have read is correct and most major lenders will insist on there being at least 65 years left on the lease. This is so that they can ensure that there is sufficient security in the property before they lend against it.
The longer you leave the lease to run down, the more expensive the freehold will become; so the sooner you purchase it, the better it will be for you. Under the Leasehold Reform Act you have the right to buy the freehold as long as you have owned the property for two years at the time of making your claim.
In order to purchase the freehold, you will first need to serve notice on the freeholder stating your intentions to purchase. Providing you meet the criteria, the freeholder should respond with information and a cost which you are free to accept or reject. As a rule, you will be expected to pay the freeholder’s legal and valuation costs in addition to the purchase price, as well as your own solicitor’s fees.
Once the terms of the purchase price has been agreed, the whole process proceeds like a normal conveyancing transaction. Whilst it is possible to do this yourself, most people do not have the legal knowledge to take this on alone and will therefore appoint a solicitor to act on their behalf.
Using Howells for your conveyancing
At Howells we have years of experience dealing with a wide range of conveyancing, including freehold purchases. Talk to us to find out more about how we can help you when it comes to buying a freehold, by calling us on 0808 178 2773 or fill out the enquiry form online today.
For more information on the difference between freehold and leasehold, read this article.
by Tristan Lewis
