In a purpose built block of flats in West London, what value would be added to the price by the owners buying the freehold?
Asked on Mar 8 2011,
Home Improvement in London |
This is very difficult to answer, as I found our recently. It depends on how long your lease has to run(and other leaseholders in your block). Once a lease is below 80 years extending it or purchasing the freehold will cost more. The freehold of the block needs to be valued so that you can calculate how much the freehold would cost you, then you can speak to local estate agents and get their opinion.
To give an idea some agents I spoke to said probably no more than 5-10% premium for a share of freehold property vs a leasehold with a long lease. The advantage for the owner or the buyer though is that the new freeholders (eg. you and your fellow present leaseholders) will look to reduce service charges, get better value for money and actually care about your flat and the block itself. So it depends on your marketing skills too; if I were selling a flat that had recently been enfranchised I would value it at the top end of the agent's estimates and would then provide any prospective purchaser with a list of benefits of buying a share of freehold vs a long lease. The estate agents don't tend to do this.
You could also speak to one of the enfranchising agents who may be able to give you a more accurate estimate of value increase. Just google enfranchisement in your area and you will probably come up with a few that would help.
Answered on Mar 12 2011,
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