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  • FIRST POST
    • MSE Jenny
    • By MSE Jenny 1st Mar 12, 3:18 PM
    • 1,218Posts
    • 3,554Thanks
    MSE Jenny
    Extend Your Lease guide discussion
    • #1
    • 1st Mar 12, 3:18 PM
    Extend Your Lease guide discussion 1st Mar 12 at 3:18 PM



    Hi all, we've written a new Extend Your Lease guide to help you extend at a fair price.

    How did you find the info? If you've done it, how did it go and do you have any other tips you'd add? How much value do you think it added to your property?

    Thanks
    for your help!


    MSE Jenny

    Last edited by MSE Jenny; 02-03-2012 at 12:59 PM.
Page 31
    • Tom99
    • By Tom99 18th Oct 17, 1:53 AM
    • 670 Posts
    • 401 Thanks
    Tom99
    If its a LA landlord watch out for any expensive repairs being planned
    • GTG
    • By GTG 18th Oct 17, 5:58 PM
    • 419 Posts
    • 54 Thanks
    GTG
    If its a LA landlord watch out for any expensive repairs being planned
    Originally posted by Tom99
    I agree Tom and I think it is a very good point. Having had that experience as an LA leaseholder I can attest to that. I would also point out that this applies to any landlord or a management company that is not directly controlled by the leaseholders. It can even apply to one controlled by them if the leaseholders are apathetic towards the running of the company. When people spend other peoples money the virtues of prudence and honesty can easily be lost.

    The conveyancing solicitor should point anything of an onerous nature like this to their client.
    • curious_badger
    • By curious_badger 22nd Nov 17, 4:00 PM
    • 79 Posts
    • 18 Thanks
    curious_badger
    Hi all, joining the thread.

    I have entered voluntary negotiations with the freeholder (Piervalley Ltd).

    We have a 1 bedroom flat, currently 83 years unexpired on the lease. Property is currently worth £159,000 (according to housing price index).

    Have been offered the following for a 125 lease:
    Premium: £6,800
    New Ground Rent: £200 (per annum)
    Valuation + Processing fees: £580
    Legal costs: £895 + vat

    Not sure if this is worth accepting, bit out of my depth. Haven't got a solicitor yet.
    • buglawton
    • By buglawton 22nd Nov 17, 7:56 PM
    • 7,038 Posts
    • 3,295 Thanks
    buglawton
    Not bad but watch out for a ground rent multiplier after every x years.
    • miller3653
    • By miller3653 22nd Nov 17, 8:11 PM
    • 6 Posts
    • 3 Thanks
    miller3653
    You should use the MSE calculator above. Should be able to extend for 99 years. A multiplier on ground rent would not be applicable on a lease extension, that is one reason for a lease extension. I suggest you seek legal advice: try Leasehold Law.
    • curious_badger
    • By curious_badger 23rd Nov 17, 1:38 AM
    • 79 Posts
    • 18 Thanks
    curious_badger
    Thanks both, the quote does mention an increase on the £200 per annum after 15 years:

    “ A new ground rent of £200.00 per annum to increase every 15 years by the higher of the increase in the Retail Price Index or by £200.00 as at the month immediately preceding each rent review period. Costs recovery clause should the Landlord wish to pursue costs in respect of any future breach “

    Not sure if that should be ringing alarm bells? Or is it normal/typical ..?
    • miller3653
    • By miller3653 23rd Nov 17, 1:58 AM
    • 6 Posts
    • 3 Thanks
    miller3653
    alarm bells definitely, seek advice
    • curious_badger
    • By curious_badger 23rd Nov 17, 11:19 PM
    • 79 Posts
    • 18 Thanks
    curious_badger
    Thanks miller - have spoken with a solicitor who agrees that it is extortianate. Time to let them have at it
    • buglawton
    • By buglawton 24th Nov 17, 7:56 AM
    • 7,038 Posts
    • 3,295 Thanks
    buglawton
    Many modern leases regrettably have a doubling clause on the ground rent every 15 or 20 years. +£200 after 15 is a doubling. But if I read it correctly, that means another £200 at 30 years to bring it it £600, that's +50% on £400 after the second 15 years. So it's not actually going to double in future 15 year milestones but just add steps of £200. If your solicitor is experienced he should be able to tell what's a 'typical' GR escalator and therefore if this is acceptable.
    • amal
    • By amal 25th Nov 17, 8:42 PM
    • 7 Posts
    • 6 Thanks
    amal
    How can we abolish leasehold? It is painfullly unfair on home owners, who purchased flats at a market value which assumed full ownership of an asset that could be passed on to generations to come. Sadly the cost of renewing the lease increases with every year, making it impossible to extend. This is a trap towards reversion of the lease.

    What can we do to get the politicians to act?
    • buglawton
    • By buglawton 26th Nov 17, 1:42 PM
    • 7,038 Posts
    • 3,295 Thanks
    buglawton
    There was an official govt petition earlier this year to abolish leasehold:
    https://petition.parliament.uk/archived/petitions/176070
    That attracted a munificent 97 signatures.

    This year there was a lot of politician soundbite style media headlines about the unfairness of recent leases, so I'm astonished about it being 97 votes in the above petition. Makes me wonder if the was another more practical petition, basically to ensure that owning leases is not a speculative for-profit activity.

    To totally abolish leasehold might be a mistake, lenders oddly enough often prefer a clear cut leasehold flat over a share of freehold type. Actually lenders on bad recent leasehold-terms houses have solicitors and were aware of the lease terms. Now the same lenders have downgraded the valuations after all the publicity. So maybe they miss-sold the mortgages the first time around!

    There was also a big leaseholder survey this year as part of a plan for legal reform, not sure where that went as I can't find it's official page. Looks like UK legislators were talking the talk and as usual not walking the walk.
    Last edited by buglawton; 26-11-2017 at 1:47 PM.
    • strawberries1
    • By strawberries1 27th Nov 17, 10:57 AM
    • 666 Posts
    • 140 Thanks
    strawberries1
    Government's Leasehold consultation paper. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/632108/Tackling_unfair_practices_in_the_leasehold_market. pdf
    • buglawton
    • By buglawton 27th Nov 17, 4:41 PM
    • 7,038 Posts
    • 3,295 Thanks
    buglawton
    Thanks Strawbs. The consultation seems to focus solely on ground rent levels. Another aspect where lease owners lever out cash by trying to impose a hefty tenant underletting fee annually (search for Pier or Freehold Managers).

    Perhaps there's still time to lobby our MPs or Lords members to get the law to firmly reflect what a number of court rulings said on the subject of underletting/subletting clauses in leases.
    • starving artist
    • By starving artist 27th Nov 17, 10:13 PM
    • 629 Posts
    • 6,208 Thanks
    starving artist
    How can we abolish leasehold? It is painfullly unfair on home owners, who purchased flats at a market value which assumed full ownership of an asset that could be passed on to generations to come. Sadly the cost of renewing the lease increases with every year, making it impossible to extend. This is a trap towards reversion of the lease.

    What can we do to get the politicians to act?
    Originally posted by amal
    Leasehold Knowledge Partnership is the main lobbying group for reform of leasehold. Peter Bottomley MP has also long campaigned for reform.
    • curious_badger
    • By curious_badger 28th Nov 17, 2:20 PM
    • 79 Posts
    • 18 Thanks
    curious_badger
    Solicitor is asking whether to proceed down the voluntary route or the formal route of "serving notice". We have decided to approach informally first and see what we get, then serve notice if we don't get a good enough offer.
    Last edited by curious_badger; 28-11-2017 at 2:43 PM.
    • davehove
    • By davehove 30th Nov 17, 3:14 PM
    • 1 Posts
    • 0 Thanks
    davehove
    Reasonable extension length?
    Hello,

    I own a flat which is a leasehold, 85 years remaining on the lease. Currently selling the flat and buyer has asked for lease extension to be included in the sale.

    Have enquired informally about extending, received quote which was at a new 99 year lease, not an extension by 80 years on the existing lease. Ground rent is due to increase to 150 / year until 2042, then gradually up to 1800 / year until expiry of the lease.

    Not clear if the standard response from the freeholder should be to increase the lease by 80 years, e.g. to 165 years, not to provide effectively another 14 years.

    Is this correct as a standard response or should I be questioning the length of the extension?
    • eddddy
    • By eddddy 30th Nov 17, 5:34 PM
    • 5,543 Posts
    • 5,228 Thanks
    eddddy
    Hello,

    I own a flat which is a leasehold, 85 years remaining on the lease. Currently selling the flat and buyer has asked for lease extension to be included in the sale.

    Have enquired informally about extending, received quote which was at a new 99 year lease, not an extension by 80 years on the existing lease. Ground rent is due to increase to 150 / year until 2042, then gradually up to 1800 / year until expiry of the lease.

    Not clear if the standard response from the freeholder should be to increase the lease by 80 years, e.g. to 165 years, not to provide effectively another 14 years.

    Is this correct as a standard response or should I be questioning the length of the extension?
    Originally posted by davehove

    What you're describing is an 'informal lease extension'. The terms can be whatever both parties (leaseholder and freeholder) agree on.

    For example, you could agree to extend the lease for 1 week at a cost of £100k, if you want!

    It sounds like, your freeholder has made a suggestion (offer). You can suggest (offer) something else if you want.

    The alternative is a 'statutory lease extension' - that always adds 90 years to the lease, and reduces the ground rent to zero. (And it's usually better value - but it typically takes a long time to arrange.)

    Here's some useful info: https://www.lease-advice.org/faq/how-can-i-extend-my-lease/
    • keveen
    • By keveen 30th Nov 17, 5:36 PM
    • 123 Posts
    • 66 Thanks
    keveen
    A flat lease should be at least 120 years I think. You can get all you need to know from this campaign group:
    https://www.facebook.com/groups/786983251448976/

    Big problems going on with leaseholds right now and the government just concluded a call for responses on the issue.
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
    • keveen
    • By keveen 30th Nov 17, 5:37 PM
    • 123 Posts
    • 66 Thanks
    keveen
    Plus the statutory route can be very very expensive. I think this website has a calculator somewhere.
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
    • eddddy
    • By eddddy 30th Nov 17, 5:45 PM
    • 5,543 Posts
    • 5,228 Thanks
    eddddy
    Plus the statutory route can be very very expensive. I think this website has a calculator somewhere.
    Originally posted by keveen
    No - the premium will almost always be 'better value' with a statutory lease extension.

    (If the law says a freeholder must sell a lease extension for £x, it's unlikely that the freeholder would volunteer to sell it for less than £x.)

    But a statutory lease extension usually takes longer and the legal costs are likely to be higher.

    There are a few lease extension calculators on the web, including this one: https://www.lease-advice.org/calculator/
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