Buying property with 80 year lease – what are the risks to buying the freehold later?
Q: I am buying a property with only 80 years left on the lease and the freeholder cannot be traced. My lender has confirmed they are still willing to lend. What is involved in buying the freehold and what are the risks that these might not work and I am left with a depreciating asset.
I would advise you to obtain valuation advice about how much it will cost to buy the freehold before you buy the house, then use this information to negotiate the price down. Valuation for leasehold houses is a very specialist area so use the RICS website and the www.lease-advice.org directory to find experts in this area.
In this instance it would pay to do your research in advance thoroughly. Better still, I would advise you to pass all relevant information about the freeholder and the lease to a leasehold expert solicitor and let him or her instruct the valuer on your behalf. In this way you will receive legal and valuation advice and you need both because even though you have a statutory right to buy the freehold of a leasehold house (even if the freeholder cannot be traced) some properties are exempt from that right and sometimes there are problems with the valuation itself. If you complete the purchase you should use any savings to buy the freehold without delay.
Margarita Madjirska Mossop, Mayfield Law