Clients of mine have been negotiating the voluntary freehold of their block of over 100 flats in Marylebone with the freeholder. Negotiations have been ongoing for a few years and as soon as they felt they were getting close to agreement, the freeholder increased the premium based on his own hunch that ground rent yields have dropped due to the low interest rate climate we are currently living in and investors paying higher prices for other investments offering a better return than can be obtained on deposit or on bonds.
The directors of the management company asked for my advice and analysis of the premium required which when carried out on a formal term and reversion basis produced an answer within just £4000 of the updated premium of about £2.5m the landlord required.
The directors were delighted as it meant they could advise all of their fellow participating tenants to proceed with the deal thus saving uncertainty and additional costs in proceeding down the statutory route.