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64 year lease..is this worth it?

HD1882
HD1882 Posts: 24 Forumite
in House buying, renting & selling
Hello!


I am seriously considering buying this property rightmove.co.uk/property-for-sale/property-64854536


It needs a complete renovation, kitchen, bathroom, carpets, plastering, central heating etc and has a 64 year lease.


I am not convinced all this is reflected in the price...


Any thoughts?
«1

Comments

  • cashbackproblems
    cashbackproblems Posts: 1,826 Forumite
    do not see the link?
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Name Dropper First Anniversary First Post
    cashbackproblems wrote: »
    do not see the link?


    This one:


    http://www.rightmove.co.uk/property-for-sale/property-64854536.html
  • HD1882
    HD1882 Posts: 24 Forumite
    Yep that's the one thanks, I wasn't able to post the link
  • HouseBuyer77
    HouseBuyer77 Posts: 961 Forumite
    Combo Breaker First Anniversary
    Well what are similar properties that have a reasonable lease length left and require no rennovation priced at? It certainly seems pricey for the location, but I know little of Ware. If it has excellent transport links to London then maybe it's justified.

    Extending the lease is likely to be expensive. You need to determine how much it will cost, presumably you'll be buying cash as such a low lease length is unlikely to be mortgageable.

    Unless it's a shared freehold situation and you can just get an extension for the cost of the legal work. Though this is not guaranteed, other freeholders may still want to charge for the extension. So don't take their word for it, in this situation you'll want to make getting the lease extended a condition of the contract.
  • always_sunny
    always_sunny Posts: 8,314 Forumite
    HouseBuyer77 wrote: »
    Extending the lease is likely to be expensive. You need to determine how much it will cost, presumably you'll be buying cash as such a low lease length is unlikely to be mortgageable.

    It depends on the lender (and the buyer). 64 lease could be mortgageable, most require 40 years after the extinguishing the mortgage, so 20 years mortgage is okay.
    EU expat working in London
  • cashbackproblems
    cashbackproblems Posts: 1,826 Forumite
    Well a lot of lenders are cautious below 80 years and I personally would not touch it unless similar properties are going for 300+.


    The vendor can start lease extensions now as you would have to wait 2 years. Also renovations could run into 30-50k depending on how bad it is.
  • HD1882
    HD1882 Posts: 24 Forumite
    We would need a mortgage and our mortgage in principle is over 30 years.


    It would take a good 6 months maybe more to complete the works required before anyone could even move in..


    And I read it two years before you can start to extend a lease and then the time it takes to extend it so it will be on 62/63 years by then..
  • HD1882
    HD1882 Posts: 24 Forumite
    similar properties but renovated are going for £250k
  • always_sunny
    always_sunny Posts: 8,314 Forumite
    Your mortgage in principle would be based on what you told the lender/broker.
    It is not the mortgage offer.

    Unless the current owner initiates the extension and pass it on to you, you would have to wait 2 years for the formal and anytime for informal. Once you start the formal process it may take up to 12 months to finish, though the clock stops at the time you started.

    Is it going to be a walk in the park? No it is not and it's going to be expensive.
    Will it be more expensive than an equivalent flat with a longer lease and expensive ground rent at the end of the journey? Maybe not.
    EU expat working in London
  • always_sunny
    always_sunny Posts: 8,314 Forumite
    HD1882 wrote: »
    similar properties but renovated are going for £250k

    Put the numbers on http://www.lease-advice.org/calculator/ just to get an idea.
    Long lease similar at £250k, Ground Rent (if not known, put £50 or so), expiry of the lease is sometime in 2081.

    I tried and says: The price of your lease extension is likely to be between £23000 and £25000 plus costs.
    EU expat working in London
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