Why You Might Want To Purchase Your Freehold?
As property lawyers we are often asked about freehold, what does it mean, can I buy it, is it worth it, why would I want to?
Freehold property can be defined as any estate which is "free from hold" of any entity besides the owner. So the owner enjoys free ownership for perpetuity and is free to use the land for any purposes in accordance with the local regulations.
“My advice would always be to look into purchasing the freehold of a property, we have many older properties that have what are known as ‘peppercorn’ freeholds, or ground rents which have existed for many years and people just pay a few pounds a year,” said Solicitor, Rakhsana Noreen.
“But it’s been in the news recently about the possibility of these rents rising, so when possible I would advise purchasing the freehold,” she added.
Benefits of buying a freehold:
- You don’t have to worry about the lease running out, as you own the property outright.
- You won’t have to deal with the freeholder (often known as the landlord).
- You won’t have to pay ground rent, services charges or any other landlord charges.
- Purchasing the freehold removes requirement to obtain consent
- Ground rent may potentially increase overtime and could deter future purchasers from purchasing your property
“It is always advisable to speak to a solicitor in these circumstances, when we are buying/selling properties for clients we will always ask about the freehold status, if the freeholder has a right to sell, ensure the document is fit for purpose and check if the purchaser is able to buy it,” said Rakhsana.
“A recent client told us she was purchasing as she wanted to build a conservatory and her lease required the freeholders consent. The freehold documents drafted repeated the same covenants thus still requiring the Transferor’s consents (i.e. the freeholder) once my client had handed over £5000! Thankfully she had instructed us and we negotiated for these provisions to be removed. Resulting in the client achieving her objective.”
For advice on your house purchase or sale, for advice on purchasing the freehold, or any other conveyancing matters please call the Pearson team on 0161 785 3500Subscribe to our newsletter
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
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