Should I Buy My Freehold?
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- Should I Buy My Freehold?
When it comes to finding a solution that meets your specifications, you have two viable options: you can either extend your lease or apply to self-manage your Canterbury estate.
Leaseholders must band together to either acquire the right to manage their property or achieve collective enfranchisement. In either case, your success could be contingent upon your readiness to negotiate.
What Does It Mean to Value Freehold?
There are various motivations for seeking a Canterbury Freehold Valuation. Some individuals are interested in finding out the worth of their property because they would like to add to its value. If you’re doing it for this reason, make sure you have a firm grasp of the context and your property’s accurate market value before you engage in any significant negotiations.
Under the amended Leasehold Reform, Housing and Urban Development Act 1993, qualified leaseholders have the opportunity to buy the freehold of their building. You may have the opportunity as a qualified leaseholder, but how do you know if you’re qualified?
If you or your group does not meet the criteria, you will not be enfranchising the freehold. Even if you are meeting the criteria, you will also need to know how much the enfranchisement costs to determine if this whole endeavour makes financial sense.
Choosing to extend your lease can be a more affordable way to gain additional years than purchasing the freehold. If you plan to manage your property through collective enfranchisement, your next best option is to make a claim to exercise the “right to manage,” which is usually cost-free except for the lawyers you may need to hire.
How Much Does It Cost to Extend Your Lease?
You guessed it – the price of securing both lease extensions and freehold purchases rises sharply as the number of remaining years on your lease dwindles.
If you’re down to the last 80 years, it’s time to put plan into action!
If your lease has less than 80 years remaining, the freehold route is the way to go, as it will usually allow you to extend the lease at no charge.
Value of Canterbury Freehold Purchase
A freehold calculator provides a good basis for assessing the value of the freehold. Figures provided by freehold calculators should not, however, be taken as gospel. You are much better off getting a proper valuation carried out by a Chartered Surveyor of the RICS.
Nevertheless, a freehold calculator should give you some decent approximate figures and even some idea of the range of figures involved. A freehold calculator, for example, will guide you in the calculation of your collective enfranchisement costs using to-hand freehold value figures and other essential variables.
Although a calculator can provide decent ballpark figures, for true accuracy, consult an RICS surveyor.
Is Stamp Duty Involved in Freehold?
Now, onto the financial elephant in the room: Stamp Duty Land Tax, or SDLT, for short. If you are paying out more than a quarter of a million pounds, you will pay at least 5% of the purchase price. If you are paying much more, you will pay a rate that rises to 12%.
- Stamp Duty Estimate: many online platforms now offer a Stamp Duty Estimate service. As Stamp Duty Land Tax can be a substantial amount of money and because it can vary fairly widely depending on a number of different factors, we feel this is a useful service to provide. The cost of SDLT can be a surprise to many people when they are purchasing property, and we want to do our best to ensure you are not caught off-guard.
- Surcharge for a Second Home: buying just one house? The quoted rates are for people who own only one property. If you are buying a second home, there are additional charges. In England and Northern Ireland, the Extra Charge is now 3% (on top of usual rates). In Wales and Scotland, there’s a new 4% charge.
- Reductions and Exemptions: Purchasing a freehold is a thrilling thing, but it can also be costly if you’re not completely aware of the entire cost history, including the stamp duty. Proper planning and consultancy can make the process easier with no need for a financial surprise fund.
The collective enfranchisement process has been complicated for local authorities in Canterbury, London, and other places like Bristol, Birmingham, Manchester, and Cardiff, but it has generally been a boon for flat share constructors. To those ends, it’s been suggested by some reports that, if they’re almost identical in every way, a flat with a share of freehold could be worth a bit more than a flat with a lease.
Collective Enfranchisement Benefits in Canterbury, London, Bristol, Birmingham, Manchester & Cardiff
To recap, the benefits of getting together with your neighbours to secure collective enfranchisement are as follows:
- You get to extend your lease, rent-free, and can keep your flat for up to 999 years.
- You no longer pay ground rent, and the value of your flat has risen and is now more desirable to potential purchasers.
- You can choose your own service providers and are under no obligation to use the old landlord’s services.
- You manage your flat and all that is in it.
