• Shared Ownership Of Freehold

    By Guest on 06th Sep 2014

    I live on the ground floor of a “one up one down” and purchased the freehold with the owner of the first floor flat so we both have 50% ownership. The owner of the first floor now has a buyer for his flat and said his solicitor told him he must have a new lease of 125 years on his property in order to sell. Is this new lease necessary and if I agree for him to go ahead will I still have 50% ownership?

  • 1 Answers

    By Guest on 06/09/2014

    As the remaining term of a lease diminishes, the leasehold interest (in other words, the property) becomes less valuable. In the circumstances you describe it makes no real difference that your neighbour owns a share of the freehold. Eventually, usually when there are less than 70 years remaining of the lease term, mortgage lenders will be reluctant to lend on the security of the lease. This makes the property less marketable. Indeed, even cash buyers will pay a lot less for a 69 year lease than they would for a 125 year one.

    If you do agree, you will still own 50% of the freehold. You may even be able to have your own lease extended at the same time and if it will probably cost you less than it would to do it independently.

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