Western Mail Property Doctor Column #8
By admin
Issued on behalf of Emyr Pierce Solicitors
When I bought my house 10 years ago it had a 79-year lease. Should I now be thinking of buying the freehold?
The principle of buying a freehold is that if you own a house under a long tenancy – and it must be a whole house, not just a part of it – and you’ve owned it for at least two years leading up to the date on which you serve notice on your landlord, you will qualify under the Leasehold Reform Act to buy the freehold. Most landlords, if they accept you are a qualifying tenant, will agree to sell the freehold on an arm’s length basis (in other words, you don’t have to go through the formal notice procedure). One of the criteria for valuing a freehold is based on the length of time left to run on the lease. The shorter the term, the more expensive it will be to buy as ultimately when the lease runs out the full value of that property will be represented by the freehold interest, whereas at the start of the term the value is almost entirely the leasehold interest. Nowadays, a term of 60 years remaining on a lease will be the minimum period and a time for you to seriously consider buying your freehold. If you are looking to sell a leasehold property with less than 60 years to run on the lease term then you may be required to secure either an extension to the leased term or purchase the freehold at the same time as you sell, as the buyer may not be able to raise the requisite mortgage finance to buy your property. You are entitled to request an extension of the lease term, which is usually for a further period of 80 years but this will also have a cost and will result in the ground rent being increased to a level more consistent with current values. The benefit of an extended lease is that you can also deal with any deficiencies in your current lease at the same time. Your buyer’s bank or building society is unlikely to entertain the idea of lending money on a typical 30-35 year mortgage without a remaining period of over 60 years of the leasehold term or unless the property is freehold.
How do I tell which of my property boundaries belong to me?
Unless the ownership of boundaries is specifically designated in the title documentation, which is the case more recently with new housing developments, then most boundaries with a neighbouring property are deemed to be party walls or shared ownership. If you live on a relatively new development then the ownership of boundaries will be indicated by ‘T-marks’ on a Conveyance or Transfer plan – the inward ‘T’ indicating ownership. However, in the majority of cases these boundaries will not be specifically designated to either property and the responsibility for the maintenance and repair of such boundary between yourself and an adjoining owner will be shared equally between you. If your property adjoins a lane or road then the responsibility for repairing the boundary will be entirely yours. But one word of warning. Just because the boundary is shared doesn’t mean that when your garden wall falls down and you happen to be a bit of a DIY brickie, you can rebuild it and then present your neighbour with half the bill. He will be quite within his rights to slam the door on you. It’s a quirky thing with shared boundaries that while there is an obligation to contribute, you cannot force someone to cough up. So make sure you agree with your neighbour first before incurring any expense on boundary work.
