How does a share of freehold work?

If you buy a property with a Share of Freehold, this means you own your property leasehold plus a share of the freehold for the building your property is in and the land it’s on. This usually applies to apartments.

Is share of freehold a good thing?

In short, yes. Having a share of freehold gives you greater control over things such as maintenance obligations which removes the possibility of being taken for a ride by an unscrupulous landlord. Holding a share of freehold also means that everyone in your property will be invested in the block to a certain degree.

What does it mean to have share of freehold?

A: Buying a share of freehold means that you will acquire a shared ownership of the freehold title relating to the building, as well as a leasehold interest in the individual flat. Usually the freehold title is registered in the name of a company in which the flat owners will be shareholders.

IT IS IMPORTANT:  Best answer: What happens when a unit investment trust matures?

How do you value a share of freehold?

The valuation of a freehold of a block of flats with long leases is based on the investment value. Multiply the ground rent figure by the year’s purchase. This is calculated by the valuer or more usually taken from the valuation table.

Does share of freehold mean you own the land?

If you buy a property with a Share of Freehold, this means you own your property leasehold plus a share of the freehold for the building your property is in and the land it’s on. This usually applies to apartments.

Is a 999 year lease as good as freehold?

Newly-created leases can be anything from 99 or 125 years to 999 years. A 999 year lease is effectively as good as freehold, and there can even be some advantages to owning some properties this way, rather than under freehold (see below). However, shorter leases become problematic sooner than you may think.

Do freeholders pay ground rent?

Benefits of having a freehold

deal with the freeholder (often known as the landlord) pay ground rent, services charges or any other landlord charges.

Can you get a mortgage on a shared freehold flat?

Whether leasehold or share of freehold, it’s possible to mortgage a flat, just as you would a house. But there’s usually a few more considerations around making sure a flat is suitable for a mortgage and criteria will vary from lender to lender.

What is the problem with a freehold flat?

The legal problem is that there is no automatic system of making the liabilities to pay monies run automatically with freehold land – this means that within the building your freehold flat is situated you are reliant upon your neighbour to maintain part of the structure such as the roof mains walls or foundations and …

IT IS IMPORTANT:  How is share quantity calculated?

What’s the difference between share of freehold and leasehold?

What’s the difference between Freehold and Leasehold? When you buy a freehold property, you own the property and the land it sits on. When you buy a leasehold property, you own the property but not the land.

Can you negotiate freehold price?

Negotiating the freehold price

It can be done informally by approaching the landlord and negotiating a deal, or you can issue a tenant’s notice to the landlord detailing your offer. The landlord will then have two months to accept or reject the offer.

How much value does freehold add to property?

According to surveyors, owning a freehold adds 1% onto the value of a flat when compared against a similar property. But the increase in property value isn’t always necessarily a persuasive factor.

Do I need a solicitor to purchase a freehold?

The legal costs can vary depending on the complexity of the matter. Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.

Who is responsible for the roof in a freehold flat?

The freeholder is usually responsible for: repairs to the building’s structure, including the roof and guttering, repairs to shared parts of the building, such as lifts and communal stairways, buildings insurance (to protect the entire building from accidents and disasters such as fire or flood).

Do freeholders have to sell to leaseholders?

If your freeholder tries to sell the freehold of your block of flats, then provided you qualify for the Right of First Refusal (see below) , they are compelled by law to offer that freehold to you and any other existing leaseholders before putting it up for sale on the open market, or trying to sell it privately.

IT IS IMPORTANT:  Frequent question: What is a share premium account?

Can a freeholder and leaseholder be the same person?

However, if the client owns both the leasehold and freehold titles in same / different legal names, they could potentially manipulate the system to forfeit the lease, passing ownership to themselves as freeholder.