Leasehold Property Professionals
029 2066 7750 Park House, PO Box 2521, Cardiff CF23 0GP
Houses - Freehold Purchase
The Term
Many owners of leasehold houses do not appreciate that at the end of the lease the landlord is entitled not only to the land, but also the house standing upon it as well. As such, for the tenant, a leasehold house will be a wasting asset. The lease will allow the tenant to remain in the house, usually paying ground rent to the landlord for an agreed number of years. Sometimes the agreed number of years – “the term” is so long that the tenant should have no real concerns – 250 years or even 999 years. Where the term is shorter, however, the tenant may well be advised that it is a good idea to purchase the freehold.
Reversion
For the landlord, a leasehold house may well be an attractive investment promising good returns. As property prices rise, which over the medium to long term has been the clear case in the UK, the landlords’ investment will rise as well. Further, as the lease gets short the prospect of the lease ending and the property being returned to the landlord – “the reversion” gets closer then values will also start to rise, the prospect of having a potentially valuable house returned to the landlord in 10 years is clearly more valuable than having to wait 250 years! The landlord therefore benefits twice – once as property prices go up and once as the lease gets shorter and the reversion nearer.
Some building societies are reluctant to agree a mortgage upon a leasehold house. For many years it was thought that the key date was 50 years remaining on the lease, but then 60 became the norm, but now it is suggested that it may be difficult to mortgage a leasehold house when there is less than 70 years remaining on the lease.
It is possible, under certain circumstances, for the tenants of a house to compel the landlord to sell them the freehold. The Leasehold Reform Act 1967 may allow certain qualifying tenants to purchase their freehold. Bureau Property Consultants provide the expert advice needed by both tenants and landlords in these circumstances.
Bureau Property Consultants represent both tenant and landlord for freehold purchase under the 1967 Act throughout England and Wales. Bureau Property Consultants have worked with both local and national law firms with regard to this potentially difficult procedure and can advise on every aspect of the process from an initial explanation of the likely issues involved, through valuation and instruction of solicitor, to negotiation with the other parties surveyor right through, if necessary, to making an application to, and appearing before, a Leasehold Valuation Tribunal.