Owning your own home

No.

But if you're unsure of what you are doing always use someone who does know. Disposal of an asset isn't as easy to rectify as correcting an error on your tax return.

A good eg is those with investment properties either not, or incorrectly, moving them into companies. It isn't rocket science, but if you fuck it up it will cost you.

We bought our flat at the same time as our downstairs neighbour (Victorian terrace divided into two flats, he has the basement, we have the first floor). They had a short lease which was extended to 125 years during the purchase. His plan is to dig a light well in half of the shared front garden and extend out the back, neither of which we are principally opposed to.

While we were embroiled in major renovations he asked if we wanted to purchase the freehold with him - I said it wasn't our priority but we could look at later. Next thing we know a Section 5A notice pops through our door telling us that he's going ahead with the purchase of the freehold on his own.

We definitely do not want him as our landlord so we began talking about jointly purchasing it again. We've had lots of back and forward (he wants to do it as ltd company, we just want to be named on the title). His whole reason for buying the freehold is to make his alterations easier, he's asked us to agree in principal to the alterations before we buy the freehold so we've been talking through the details of those.

Last night he snapped at us requiring assurances that we can get to our roof to make repairs once both gardens are full of extension and light well. He now says we should forget the whole thing and not purchase the freehold.

Given that he's already tried to buy it outright, it's only 6k in total, and our notice of first refusal has now expired (my understanding is that the freehold can be sold on the open market now) he's probably going to go ahead and buy it himself.

Is it worth trying to talk him back into buying it together? How bad can it be to have him as a freeholder? He has already been quite shitty about repair work, going back on verbal agreements, vaguely threatening to report our windows to planning... is there way to stop him buying it?

could you not buy the freehold on the open market, so you become his landlord? Or does that just get you into a bidding war?
If you have misgivings about him being your landlord, then I'd say get back to the negotiating table to get a result you can live with.

Having a dilemma at the moment of whether to proceed with this extraordinarily expensive kitchen extension, or sack it off and move out of London to a house that's 3 times the size.

Extending is banking on London prices going up, otherwise it's money down the drain. Moving means my wife having to commute 90mins each way, minimum.

We're in that position of do we 'downsize' to a much bigger house now, before we've started a family. Or hold our nerve in London and reap/regret it...

We could, but it'd be 6k for something we don't even really want. It's a long enough lease so we don't need to think about extending it. Half, 3k, was already annoying to pay just to stop him becoming our landlord outright.

How bad can it be to have him as a freeholder?

A fucking nightmare

If I were you, I'd do everything I could possible to be the Freeholder, in a house that's divided in to two flats.

My sister owns a top floor flat above the freeholder, who live on the ground floor. It's been pretty annoying for her generally - them turning down requests to extend, charging them for maintenance, etc, generally just someone having control over you who ideally you'd be in an equal partnership with.
I'd definitely try to co-buy the freehold if you can.

Edit - I'd assume your home's value would go up by at least 3k if you had a share of the freehold too.

I'm not sure it really would as the lease is already 125 years. It probably would anecdotally. I can hear the estate agent now "share of a freehold" wink wink

Honestly speaking I wouldn't even want a share. I'd want the freehold. In a flat that's divided in to two flats. There's no benefit in having a share. There's a huge benefit in being the freeholder.

I suspect he knows this, which is why he wants to put @dbr off from getting involved.

What do you mean by there being no benefit to owning a share?

Because it means you have to compromise. And if the other shareholder is difficult, everything becomes time consuming and difficult. Unless you have a great relationship with the other share owner, it's a ball ache compared to being a leaseholder, providing the other flat is leasehold too and you have long leases. In that situation you can at least gang up on the freeholder if they try to stiff you.

If you are the sole freeholder, and resident, in a two flat property, you can do what you like, pretty much, within the grounds of the law and the existing leases. IIRC the leaseholder cannot force you to sell a share to them, and you can impose service charges and all sorts of nonsense, threaten major works to get them to do what you want etc. It really is a nightmare for the disenfranchised leaseholder.

So in order of desirability:

1. Owning freehold outright
   
2. Both flats leasehold with external freeholder
   
3. Owning share of freehold
   
4. Leaseholder with neighbour as freeholder
   
   

I'm in a very similar property (Victorian house, I'm in the upstairs flat) and own a share of freehold with the downstairs. We don't do it through a limited company (not really sure what the benefit is for two people and the faff of having to file accounts), we're both named on the freehold title and then each flat has a lease.

I get on well with the guy downstairs so it works fine. The only cost is the building insurance, maintenance costs are dealt with as and when they arise. It's an easy arrangement and you have the security of being able to veto any stuff you don't like.

One big benefit for me was that I could do a loft conversion with a minimum of effort (just had an email from the guy downstairs saying he was OK with it) and extending the lease is just solicitor's fees.

I'd agree that share of freehold would probably add more than £3k to the property value, it's just a bit more security than only having a lease.

Owning the whole freehold gives you more options but a share is definitely beneficial.

In my view, yes, for two flat properties. And like @aggi says, if you get on well with the other live in share, it will be good, and in that case a share might be desirable. They can move, though, and if you veto anything, things can turn sour quick. And from what you say about your neighbour, it sounds bad. Anything else is different, because in a three flat property and a live in freeholder the other two leaseholders can force a share.

I don't really feel comfortable buying the whole freehold. Am I just being too British?

not really sure what the benefit is for two people and the faff of having to file accounts

My exact view, but he insists on the ltd company route. As far as I can see it's not that much worse, just a bit more faff. It's a concession I'm willing to make.

While you guys are arguing about who buys the freehold, you're exposing yourself to being exploited by a third party landlord, to the detriment of both of you. If Assethold or Triplerose or Tchenguiz gets hold of your freehold, you will be absolutely fucked. You will go from being a home owner to a mortgaged tenant.

Read up on what happens when your freehold is purchased out from under you. Read up on how hard it is to get out from that situation. Both of you get it together and block this exposure you currently have. If you think the other guy could be a potentially awkward landlord, wait until you have a landlord who sees your home as nothing but a finance stream for his legal teams to feast on.

It happened to me. I paid £2400 in service charges this year. I paid £1000 in 'legal fees' for owning dogs which are allowed in my lease, but I don't have the legal resources to challenge. I will be paying an extra £2k next year for major works I don't want. Three years ago I paid £5k for major works I didn't want. I have paid for two roofs in 10 years. I have been to court four times in 2018, I'd never been before owning this place. You are deeply, deeply vulnerable, and your neighbour is one of the smallest fish in the London pond. You can manage him. Managing the sharks out there in the property game is another matter.

Seriously mate. Sort this. I don't care if this guy is a KKK member, work with the prick and protect yourself. It's a fucking jungle out there.

^ THIS

@dbr Work with the dude to buy it, but be completely prepared to buy it yourself if you can't agree.

@chrisbmx116 Seen this done in posh houses.

Options.

1. Pump.
   
2. Lower ceiling on batten below.
   
3. Raise floor its on.
   
4. Pop waste out the nearest external face.
   
   

Ive been Principal Designer in a ton of posh refurbs around marble arch. One chap from Saudi insisted on a minimalist shower room (6mx4m), essentially a steel frame with marble panels, a soffit which was a complete 24m sq shower head! Water was pumped out. Any way. The panel with the door in was a sheet of glass that frosted when you got in (privacy). He insisted the door opened inwards (it was a bloody massive door, glass and heavy) I made the point that ythis was silly and someone would get stuck, dot do it, but got the "Its my money routine". So door opens inwards. Ok put a motor assist on it. "nope", not minimalist. Right. A great big fuck off handle at least then. Oh no. The handle ended up being a 3cm cube piece of glass stuck on. I got my prof indemnity letter in saying its a shit idea. Long story short, he moves in and gets stuck in the shower to be found by the cleaner (hehehe). Then tries to sue the developer. Nice. Forgot. He also had a disco light system built behind the marble. Classy. I could go on.

Wet rooms are ace but fitting them into Victorian homes is tough and requires compromise.

Best wetroom ive seen is the Chairman of Wanda the Chinese company. Got raised in a conference call argument with the guy (3rd richest man in china). That's another story...

...extraordinarily expensive kitchen extension...

Extending is banking on London prices going up, otherwise it's money down the drain. Moving means my wife having to commute 90mins each way, minimum.

Surely extending will also bring you the benefit of living in a nicer, bigger place? Regardless adding M2 usually = increase in value relative to the market. So if you're not selling immediately anyway and the market drops, you will suffer either way, and having a better property may put you in a better position.

Is there anyway you could trim some of the costs? Brevitt toaster instead of Dualit, etc.?

My 2p;
90mins each way = an abhorrently shit quality of life. There's a thread on here where people who've had to move out of London justify why it's been a good move. Go read it if you want to be swayed. I'd say if you are lucky enough to have a home in London and can afford it, never* leave.

*unless you're emigrating obvs.

I'm not sure it really would

It really would. I wouldn't buy a flat that wasn't at least share of.

For £3k it's a total no brainer. I disagree that there's no benefit to owning a share, with a share you have equal power, if the owns it he has absolute power.

Get back round the table and explain that the access thing is not about him because he's so nice and reasonable* but in case he sells and you get a nightmare neighbour.

*doesn't need to be true

he moves in and gets stuck in the shower to be found by the cleaner

This is excellent. You shouldn't laugh at others' misfortune but fuck it, I'm having a good chortle.

Surely extending will also bring you the benefit of living in a nicer, bigger place?

Is there anyway you could trim some of the costs? Brevitt toaster instead of Dualit, etc.?

It will be bigger, but perhaps only serve our needs for another 5 years. And it's crazy expensive because terraced kitchen = all digging done by hand, apparently. We're looking at changing the plans slightly.

If you are lucky enough to have a home in London and can afford it, never* leave.

No doubt, I am absolutely astounded I ever even managed it. I feel lucky to have a home in London, but starting to not feel lucky to live in London... if that makes sense

I disagree that there's no benefit to owning a share, with a share you have equal power, if the owns it he has absolute power.

Yeah. There is benefit to having a share, but it can make your life more difficult depending on the relationship you have with who you are sharing with and what you want to do. If you have a freeholder that's not crazy you might get a quieter life. Or not. It really depends. I'd say with SOF you get less risk but a more complicated life, with LH you get a quieter life but more risk. Both assume a lot. But with the entire FH you win hands down, no need to assume anything.

I absolutely would not buy a leasehold only flat in a building that's two flats unless I had potential access to the freehold and I would always go after the entire freehold, only getting share if that was the best I could do.

I know people who have moved out of London and the commute is the thing that breaks you (from what I've heard) but it is balanced out by the making of new like minded friends and the space of property you can afford.
I'm currently looking for larger property in London, knowing that I can move further to the edges of London to get something bigger, but knowing that our budget will always be just under getting the size of house we really want.
As long as your missus is willing to hack the commute and you've no desire to stay in London long term. I'd say go for the bigger space in a community you can live with/enjoy..