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Buying Freehold Reversions


Much land in England is leasehold. Sheffield in particular is known for its leasehold houses. In addition to the ground rent there can be other costs for tenants of long leases, for example, if they have to obtain a landlord’s consent to alterations.

There is a procedure that allows a tenant who has a lease of more than 21 years and has owned the house for more than 2 years to force a landlord sell the freehold reversion to them* but it is not uncommon for a landlord to also sell the freehold reversion to a tenant outside the statutory procedure.

What price should I pay?

A “rule of thumb” that some landlords refer to is that the purchase price should be 15 to 30 times the annual ground rent. You will also be expected to pay the landlord’s reasonable legal and surveyor’s costs. However, often landlords will seek to charge more for their freehold reversion.

We cannot give you valuation advice and the valuation mechanism set out in the legislation can be complicated. If you are considering purchasing the freehold of your house you may wish to speak to a valuer or, there is information available from the Leasehold Advisory Service that may help you with your initial decision before you instruct a solicitor to act for you.

Is it worth it?

The longer the term the less benefit you will gain. Most banks and building societies will lend against a lease that has a term of 75 years or more although the requirements vary between institutions. Once a lease has less than 100 years remaining on the term of the lease, a buyer may consider it could affect the value of the property.

If the remaining term is 80 years or less a landlord maybe able to take in account something called marriage value in determining what they can charge you for the freehold reversion. Marriage value is the additional value to you of owning both the leasehold and freehold titles.

Another consideration is whether you or a previous owner has made any unauthorised alterations to the property or whether you want to make any alterations to the property which landlord’s consent will be required for.

Depending on your landlord they may charge a fee for providing consent. In such cases you may prefer to buy the freehold.

Landlord’s Offers

You may receive an unsolicited offer from a landlord to buy the freehold reversion of your property or you may have contacted them. Some landlord’s or their agents will send the transfer documentation and ask you to pay a deposit to them. We would recommend that you instruct a solicitor, before paying any money to the landlord, to advise you on the documentation and act for you in your purchase. It is important that the documents contain the correct provisions and the transfer of the freehold to you is registered properly at the Land Registry.

Our Residential Property Team will be happy to help guide you throughout, from making your decision to registering your title.

* There are other criteria specified in legislation that may apply to your property and affect whether you can require a landlord sells the freehold reversion of your house to you.

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