You have a choice between two ways of finding a solution according to your requirements: extend your lease or apply for the “right to manage” your London building. You would need to join together with other leaseholders to take over the management of your building and the same is true of collective enfranchisement.
There are a number of different reasons why you may decide to get a Freehold Valuation London for their property. For example, adding value to your property. For this, you will need to prepare for negotiations with an accurate market value.
Qualifying leaseholders have the opportunity to collectively buy the freehold of their building under the amended Leasehold Reform, Housing and Urban Development Act 1993. To determine if you qualify and find out how much it should cost to acquire the freehold, you may need to get a collective enfranchisement report produced by an RICS registered valuer. Continue reading to see whether getting a Freehold Valuation for your London property will be worth the calculation. The benefits of a collective enfranchisement include:
eliminating ground rent, service charge and landlord fees and costs
Opting to lengthen your lease may be a cheaper way to add years compared to buying your freehold. Planning to take over management by collective enfranchisement? You’ll probably be better-off making a claim for the ‘right to manage’ – often possible for free except for the legal bill.
If you are buying a freehold property there is a financial element that is not easily ignored: the Stamp Duty Land Tax (SDLT). It is a tax on homes and land and is calculated on purchase. The rate varies depending on the cost of the property and your situation. Important factors to consider:
Buying a freehold can be an exciting experience, but it can also be expensive if you are not aware of the entire cost history, including the stamp duty. Proper planning and consulting can make the whole process run smoothly and avoid any unnecessary financial surprises.
The cost of both lease extensions and collective enfranchisements increases as the number of years on your lease decreases. If you’re approaching the 80-year mark, you’ll want to start thinking about taking action sooner rather than later. If you already have less than 80 years’ remaining on your lease, you can buy the freehold (providing your fellow freeholders are interested) and usually extend your lease for free.
As a guide, you should use the premium provided by a freehold calculator. Do not present any figures provided by a calculator as evidence in court and do not assume that the figures are 100% accurate. Your flat or building should be valued by an RICS Chartered Surveyor. Nonetheless, a calculator will give you a reliable approximate range estimate. To use a freehold calculator, you will need these figures:
To calculate the cost of collective enfranchisement, the other variables required are the increase in your property’s value; the future forecasted inflation; and future forecasted interest rates. A calculator usually has reasonable default values to provide you with an estimate, but to get an accurate valuation, please speak to an RICS Chartered Surveyor.
It has been suggested by some reports that if two flats are the same in almost all ways, other than one has a lease and one is a share of freehold, then generally it would be the case that when you came to sell one the freehold flat could be sold for quite a bit more. Normally, most surveyors will add 1% to the value of a flat in relation to the benefit of a share of freehold.
In sum, the advantages of collective enfranchisement comprise:
