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First time buyer - property with 58 years lease

jaishah11
jaishah11 Posts: 6 Forumite
in House buying, renting & selling
I am looking to buy a property and I am a first time buyer.
My annual salary is 59000 GBP and my DoB is 02-02-1985. I am an Indian resident and I have Infinite Leave to Remain VISA for UK.

I did a viewing for a property recently.

Situation is that the property is with 58 years of lease. Lease owner is happy to write a memorandum that he will extend the lease after two years on 30 thousand pounds.

Can you please advice if this is a good move? Can the lease owner not honor the memorandum later or ask for more money? What could be my options in that case?

Regards,

Comments

  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Cash buyer?

    Or mortgage?
  • Hoploz
    Hoploz Posts: 3,888 Forumite
    Are you saying that the seller promises to extend the lease two years after you buy the property? He won't be a leaseholder so won't be able to! The point of waiting two years to extend is that the leaseholder has this length of relationship with the freeholder. So that would be you.

    I don't understand what you're trying to do here.

    If you're buying cash it's up to you when or if you extend the lease.
    If you're buying with a mortgage then you probably won't find a lender who will proceed with such a short lease.

    If you want to buy (with cash) and extend the lease you can either
    1) wait two years and extend via statutory lease extension or
    2) approach the freeholder to ask for a cost to extend on an informal basis, which you can do at any time, though may find the statutory route cheaper, and you'd need to check the terms of the new lease carefully as less favourable terms can be put in via the informal route.

    First thing to do is explore some official confirmation of cost to extend ... and see whether the 30k is correct and do-able
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    I suspect he means
    jaishah11 wrote: »
    ..... [STRIKE]Lease owner[/STRIKE]freeholder is happy to write a memorandum that he will extend the lease after two years on 30 thousand pounds.
    Obviously the current leaseholder can promise nothing after selling the lease. And presumably the current leaseholder would not have to wait 2 years anyway - he could do it now (assuming he's owned for 2 years).
  • jaishah11
    jaishah11 Posts: 6 Forumite
    Mortgage. 10% deposit. 90%LTV
  • jaishah11
    jaishah11 Posts: 6 Forumite
    You are right, it's the freeholder who is happy to write a memorandum. My mistake.

    Current leaseholder lives out of UK and he is not able to raise 30 thousand pound to extend the lease. What iIwas hoping is after two years iIcan extend it myself by remortgaging the same property.
  • omariqy
    omariqy Posts: 138 Forumite
    First Post First Anniversary Combo Breaker
    Not sure you will get a mortgage anywhere with that much remaining of the lease.
  • jaishah11
    jaishah11 Posts: 6 Forumite
    Yes, it looks like
  • Hoploz
    Hoploz Posts: 3,888 Forumite
    jaishah11 wrote: »
    Mortgage. 10% deposit. 90%LTV

    No chance.
  • Cakeguts
    Cakeguts Posts: 7,627 Forumite
    First Anniversary Name Dropper First Post
    Property with a short lease is cheap compared to property with a long lease. The reason why the property with the 58 year lease is cheap is because no one can get a mortgage to buy it. The only people who can buy it have to be able to pay for it with money they already have.

    If you need a mortgage you will have to find somewhere with a much much longer lease. However a property with a longer lease will be more expensive.
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