How to value the freehold of a block of flats

The freehold value is thus calculated on it’s expected future income. The following notes should be helpful. Income Received-The income received is fairly easy to establish. Firstly, the annual ground rent is taken and multiplied by the number of flats in the block.

For example flats at £75. The valuation of a freehold of a block of flats with long leases is based on the investment value.

To calculate approximately how much your freehold interest is worth, you will need to enter specific details into the freehold calculator tool for each flat in the building. These details include the current market value of each flat , the start date of each lease , the current annual ground rent for each flat and the original lease term for each flat (this is commonly , 1or 9years ). What is the valuation of a block of flats? What do you need to know about buying block of flats? How does the cost of a freehold affect the value of a flat? While the bulk of the value is in the long leases granted to the leaseholders, the freehold company still has the right to receive ground rent from these flats and as such, there is a value attributable to their interest in the property.

If a lease has less than years remaining the increase in the value of your property caused by Freehold Purchase must be shared 50:with the Freeholder. Variations – effects on valuation. To recap on the original valuation: a block of flats, years unexpire ground rent £pa, current value £150k , improved value £165k , with all leaseholders participating.

Marriage Value £139x = £6486. Using the whole market of commercial and specialist buy to let lenders we will source the best rates on any freehold block of multiple flats for buy to let mortgages – both purchase and remortgage. As a rough rule of thumb, the cost of a share of the freehold for one flat (excluding legal fees) is similar to the cost of extending a lease by years.

There are a variety of factors that can affect the value of a freehold asset. Besides the value of the leasehold properties , factors can include the annual ground rent (the yearly rent paid from the leaseholder to the freeholder ) the length of the lease term (how many years are left on the lease) and the location of the property. Landlords who want to sell the freehold of a building containing flats usually have to offer the leaseholders the first chance to buy it.

For flats which do not take part in the process, the freeholder may need to be compensated for missing out on hypothetical profits due from non-participating flats seeking future lease extensions. How to Buy a Freehold -Most leaseholders in blocks of flats , choose to buy the freehold of their building as it gives them more control over the running costs of the property. As well as this, knowing you own the property ‘ freehold ’ rather than for a specific period of time, psychologically, provides a good deal of peace of mind. Yashmin Mistry of JPC Law highlights an area of law of most interest to leaseholders – the right to purchase the freehold of your block of flats collectively. The Leasehold Reform Housing and Urban.

I own the freehold on both my flat and the flat downstairs. Multi Unit Buy to Let Mortgage Freehold Block. The downstairs flat only has years left and we have offered the owner the right to buy. I no longer want his freehold as I have to fight for the insurance and ground rent every time. Costs are per flat for a straightforward case and can vary dramatically.

Based on £2annual ground rent and block of flats with all flats taking part - legal fees would be cheaper per flat for larger blocks. Making a flat more attractive to mortgage lenders is a key advantage of buying the freehold.

When the freehold is purchase the leases can be extended to 9years and modernised where necessary so enhancing the value and marketability of the flats in question. Buying your freehold is not a cure-all solution. Sell My Flats is a cash buyer of freehold blocks of flats.

We are quick and easy to deal with. For the purpose of this exercise we will assume that both flats will have a market value of £200with a new long lease. In our previous blogs we have discussed how the freeholder has to be compensated for the loss of ground rent, the potential reversionary value of the flat at the end of the original lease and a share of the ‘marriage. Many developers and builders of blocks of flats underestimate the value to them of the freehold interest in a building after they have completed a project and let all of the flats on long leases. Most modern leases are usually granted for a period of either or 1years at a ground rent of approximately £2annually doubling at regular.

Typically the freehold of a block of flats is owned by a separate landlord. Enfranchisement of Flats. In many cases that landlord is also responsible for managing and maintaining the building and service charges are paid to them to cover the cost of managing, maintaining and insuring the building.

There may also be a separate third party management company who deals with this. The Association of British Insurers (ABI) has a calculator that will help you work out the rebuild value of your individual flat. If you are insuring a block of flats , then you may need to have a professional valuation survey done to get an accurate rebuild value.

Once you have a rebuild value it is worth re-assessing it every three years or so. Companies owning the freehold interest in a block of flats. Buying the freehold can give you more control over what you pay out in maintenance charges and protect the value of your property - but buying a share of the freehold in a block of flats is different from buying the freehold of a house. Part of the answer will depend on the exact wording of your lease (as it does in most legal problems relating to leasehold property.) As a matter of general law there is nothing to stop a freeholder from adding an additional storey to an existing building, since the freehold includes the airspace above the building. As many of the repair and management responsibilities for a block of flats sit with the freeholder, it can be an extremely tough job.

Find the best offers for flats freehold block investment. Video tour available on request share of freehold this well-presented top floor. The property is located within easy reach of local shops, transport links.