Ten things you need to know about... leasehold and freehold properties ¦ Property Guides on Times Online

How to buy the freehold of your flat

- Check if you are eligible to buy the freehold. In order to do so, the number of participating leaseholders must represent at least half the total flats in the building; if there are only two flats, then both leaseholders must participate. The term of your original lease must be at least 21 years, and no more than 25 per cent of the building can be in non-residential use.

- Once you have established how many leaseholders are needed to go ahead with the purchase, you will need to organise a group, and may well need to canvass leaseholders in your building if too few step forward.

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• Ten things you need to know about... leasehold and freehold properties

- Appoint a valuer and a solicitor to determine the cost of the freehold and to carry out the necessary legal work.

- Select a nominee purchaser – which can be one person, or a company formed by the leaseholders for the purpose of the purchase – to serve notice on the freeholder or your intention to buy.

- The landlord will then come back with a counter-notice, and negotiations to find the right price will follow. If you cannot agree a price with the freeholder, you will need to take the case to the Leasehold Valuation Tribunal (LVT) to have the matter settled.

How to extend your lease

- It is possible to purchase an extension to your lease in most cases although there are exceptions, such as if the majority of the leaseholders in your building are already applied to purchase the freehold, or if the term of the original lease was less than 21 years. Such properties are rare, but they do exist in sought after locations in central London, such as Eaton Square.

- Get a surveyor to provide you with an estimate of the cost of an extension: you can then present the freeholder with a figure. Valuing a leasehold extension is a complex business: it depends on a number of variables, including the market value of the flat, the length of time left on the lease, the value of the landlord’s interest (how much ground rent is received, how much the flat is likely to be worth at the end of the lease). As with ordinary house purchase, the cost of an extension is a matter for negotiation.

- You can then either serve a formal notice of your intention to extend your lease, or you can open informal talks with the freeholder.

- If you and the freeholder cannot agree a price, you need to take the case to the LVT.

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