Freehold Valuation

Understanding Ground Rent

In the United Kingdom, ground rent relates directly to the ownership of leasehold property. When a person obtains a leasehold on a property, they’re given the right to live in that property for a certain defined length of time, as specified in the lease. But the person who lives in the leasehold property doesn’t own the land on which the property is situated. That land still belongs to the person who owns the freehold of the property. And the leaseholder has to pay ground rent, in some form and to some amount, for the use of that land during the term of the lease.

The lease contract will take up the amount of money demanded for the ground rent and when that payment is due. The ground rent could be a flat sum for the length of the lease; however, it could increase over the term of the lease.

Ground rent is sometimes a small amount, perhaps even called “peppercorn” in old leases. But some modern ground leases have terms that escalate payments to amounts that are very difficult for leaseholders to pay. Moreover, these amounts are sometimes not far below what a leaseholder might reasonably be expected to pay if the property were freehold. The UK’s leasehold law reforms are an attempt to remedy this situation.

Calculating Manchester Freehold

Ever thought about just how much your freehold is worth? You can simply use a freehold calculator. It doesn’t matter if you’re an individual freeholder, a leaseholder, or part of a “collective”; knowing the value of your freehold could mean the difference between a smart investment and an expensive miscalculation.

Obtaining the freehold on a house or a set of flats may seem a scary task, but just imagine the potential for your property to appreciate in value after you secure the freehold. You can use a freehold purchase calculator to get a better estimate of what that might look like.

The calculator for leasehold enfranchisement or lease extension valuations derives its workings from sophisticated expert methods used by surveyors and valuers. On these matters, the surveyors able to give advice in the context of high-value homes, be they flats or houses, that people live in or rent, on what should be a secure long-term basis. If you’re counting on these calculation methods for anything beyond a very rough estimate, you are at risk of making a mistake. 

A leasehold calculator serves merely as an estimate and not as a definitive statement of possible revenues. It works under the assumption that all the building’s leases are the same and that all leased spaces yield the same amount of money. The building actually contains a mixture of lease lengths and ground rents that differ enough that a more precise statement of possible revenues would require their combination in an equally precise calculation.

What are the Cost Factors Associated in Freehold Value

Numerous factors influence the cost of the freehold. These range from the dimensions and site of your property to the number of freeholders and their qualifying flats, the lapse of time left on their leases, the added benefit accruing after you take the freehold, etc. Costs to think about include:

Marriage Value: the freeholder is entitled by law to half of any increase in the leasehold’s value. When you investigate the feasibility of enfranchisement and then go ahead with buying the freehold and extending the lease, the market almost certainly values your flat higher than before. 

Compensation: if the landlord’s interest suffers as a result of collective enfranchisement (in other words, if any of the landlord’s remaining freehold lose value), you may have to pay compensation.

A Guide to Purchasing Manchester Freehold

As per the rules, inhabitants who rent their flats have the rightful legal grounds to use that stance to create a fund and purchase a minority interest in the ownership of their property. This causes freeholders some distress. The actions of the lessees are commonly termed as “collective enfranchisement.”

As a joint freeholder of your flat, you can significantly improve its valuation and manage maintenance costs, thereby cutting service charges by hundreds of pounds a year. You can also extend your lease for 999 years—without paying a penny—and eliminate ground rent.

Typically, when you have fewer years left on your lease, the cost of buying your freehold, or your property’s title, will be more expensive. Still, there are a number of other options that might also save you money. A freehold purchase calculator can help you determine if purchasing your freehold is going to be cost effective or not.

Process for Buying Freehold Property in Manchester, Bristol, Birmingham, Manchester, Cardiff, and London.

In case you opt for collective enfranchisement when making your freehold purchase, you can either come to a private arrangement with your landlord or follow the legal procedure. If you decide on the formal route, the first step is to serve a notice on your landlord. Your notice is an official document stating that you intend to make an offer to buy the freehold. You then have to wait for your landlord to respond.

Your landlord may not be very happy with your offer and that is common. They might counter with a number they feel is more suitable, and you then have a certain amount of time to respond. If you can’t work it out, you can take it to a tribunal and let them decide. However, doing so can be very expensive and you might be on the hook for some or all of your landlord’s costs.

It is advisable to have the freehold valued by an RICS Chartered Surveyor before an offer is made. This ensures that the buyer (or anyone acting on their behalf) has a valuation that can serve as useful evidence if the buyer subsequently needs to make an appeal. The team is always on hand to provide qualified expert advice for anyone uncertain about their freehold situation. For preliminary figures, a freehold purchase calculator can give you some idea of what it would cost in total.

Surveys of Commercial Property

If you’re thinking of acquiring, leasing, subletting, disposing of, or altering commercial premises in Manchester, you would be well advised to locate a surveyor skilled in the nuances of commercial building surveying – should you spot a defect in a commercial building you can use that information to negotiate an asking price for the property that’s considerably lower than what the seller originally wanted, or you can talk your way out of a bad deal altogether. 

Our Manchester-based team of RICS-compliant commercial building surveyors is equipped to handle matters throughout Manchester.

Contact

Our team prioritizes client care above all else. We look forward to being in touch with you so you can instruct a surveyor in Manchester, London, Bristol, Birmingham or Cardiff. You can reach out to us easily. Just fill out our form, and we’ll get back to you with a free quote for your survey. All our surveyors are qualified as members of the Royal Institution of Chartered Surveyors (RICS) and we are one of the UK’s leading providers of building survey and valuation services:

The property survey you commission will be carried out by an accredited professional. Your chartered surveyor will be a member of the Royal Institution of Chartered Surveyors (RICS) or the Chartered Institute of Building (CIOB), or will belong to some other industry-standard professional body. Rest assured; you will receive highest quality of professional service for your survey.

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