Buying Your Freehold | NatWest

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Your home may be repossessed if you do not keep up repayments on your mortgage

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If you live in a flat, chances are you're one of the millions of people in England and Wales who holds a leasehold. This means that while you can own and occupy the property, you'll have to pay the freeholder (the owner of the land) regular ground rent and service charges for the privilege.

If you want to extend the lease, this also has to go through the freeholder and can prove expensive. If you and your neighbours hold the freehold, extending the lease could even be free. But how do you go about it? This guide aims to clear that up and more.

Things to consider

Do your sums

Work out if it's actually worth purchasing your freehold. If all you're after is a longer lease, you might find that it proves cheaper to simply extend it rather than buy the freeholder out.

 

Cost

There's no guarantee that the value added to your home will cover the amount you shelled out in the first place – especially when you throw legal fees, valuation fees and stamp duty into the mix.

 

Getting everyone on board

You'll also need to get the other lease owners in your building on board to pay for their share. This whole process is called 'collective enfranchisement', which sounds complicated but is just a legal term for all leaseholders in the building clubbing together to buy the freehold.

 

Additional responsibilities

As a collective, you'll need to band together to create a freehold company, and will be responsible for organising insurance and maintenance. Don't forget that if the building isn't kept in good condition, its value could decrease rapidly.

What are the benefits?

No more ground rent

The biggest win is that you'll no longer need to pay ground rent, and you'll have a lot more control over the upkeep of the building too. This means your yearly service charge could get considerably cheaper.

 

You're in control

A freehold also comes with fewer conditions, so you'll have a lot more say over how you live in your property – whether that's being able to keep a pet, or being able to work on your home without needing to seek permission.

 

Helping you sell

Buyers tend to view a share of a freehold very favourably, so it could attract a lot more potential buyers if you decide to sell later.

Additional borrowing
Add your signposting title here… Additional mortgage borrowing

Looking to make some home improvements? If you have a NatWest mortgage you could borrow up to 90% loan to value. Additional borrowing is available on a capital & interest repayment basis.

Your home or your property may be repossessed if you do not keep up repayments on your mortgage.

Additional borrowing
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