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  • FIRST POST
    • HD1882
    • By HD1882 13th Mar 17, 3:04 PM
    • 6Posts
    • 0Thanks
    HD1882
    64 year lease..is this worth it?
    • #1
    • 13th Mar 17, 3:04 PM
    64 year lease..is this worth it? 13th Mar 17 at 3:04 PM
    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?
Page 1
    • cashbackproblems
    • By cashbackproblems 13th Mar 17, 3:19 PM
    • 1,649 Posts
    • 631 Thanks
    cashbackproblems
    • #2
    • 13th Mar 17, 3:19 PM
    • #2
    • 13th Mar 17, 3:19 PM
    do not see the link?
    • davidmcn
    • By davidmcn 13th Mar 17, 3:26 PM
    • 5,290 Posts
    • 4,954 Thanks
    davidmcn
    • #3
    • 13th Mar 17, 3:26 PM
    • #3
    • 13th Mar 17, 3:26 PM
    do not see the link?
    Originally posted by cashbackproblems

    This one:


    http://www.rightmove.co.uk/property-for-sale/property-64854536.html
    • HD1882
    • By HD1882 13th Mar 17, 4:00 PM
    • 6 Posts
    • 0 Thanks
    HD1882
    • #4
    • 13th Mar 17, 4:00 PM
    • #4
    • 13th Mar 17, 4:00 PM
    Yep that's the one thanks, I wasn't able to post the link
    • HouseBuyer77
    • By HouseBuyer77 13th Mar 17, 4:08 PM
    • 850 Posts
    • 801 Thanks
    HouseBuyer77
    • #5
    • 13th Mar 17, 4:08 PM
    • #5
    • 13th Mar 17, 4:08 PM
    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
    • By always_sunny 13th Mar 17, 4:19 PM
    • 2,966 Posts
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    always_sunny
    • #6
    • 13th Mar 17, 4:19 PM
    • #6
    • 13th Mar 17, 4:19 PM
    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.
    Originally posted by HouseBuyer77
    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.
    Expat with an EU passport
    • cashbackproblems
    • By cashbackproblems 13th Mar 17, 4:24 PM
    • 1,649 Posts
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    cashbackproblems
    • #7
    • 13th Mar 17, 4:24 PM
    • #7
    • 13th Mar 17, 4:24 PM
    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
    • By HD1882 13th Mar 17, 4:31 PM
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    HD1882
    • #8
    • 13th Mar 17, 4:31 PM
    • #8
    • 13th Mar 17, 4:31 PM
    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
    • By HD1882 13th Mar 17, 4:32 PM
    • 6 Posts
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    HD1882
    • #9
    • 13th Mar 17, 4:32 PM
    • #9
    • 13th Mar 17, 4:32 PM
    similar properties but renovated are going for £250k
    • always_sunny
    • By always_sunny 13th Mar 17, 4:35 PM
    • 2,966 Posts
    • 3,142 Thanks
    always_sunny
    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.
    Expat with an EU passport
    • always_sunny
    • By always_sunny 13th Mar 17, 4:38 PM
    • 2,966 Posts
    • 3,142 Thanks
    always_sunny
    similar properties but renovated are going for £250k
    Originally posted by HD1882
    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.
    Expat with an EU passport
    • HouseBuyer77
    • By HouseBuyer77 13th Mar 17, 5:06 PM
    • 850 Posts
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    HouseBuyer77
    similar properties but renovated are going for £250k
    So £60k difference in value, say £25k lease extension (given what always_sunny says). Can the renovations be done for £35k? Impossible to say with the detail given on the advert. Still sounds a bit tight to me.

    Have you thought about how you would finance the renovations? Your mortgage LTV will be based on the purchase price so you'll need cash (in addition to the sum needed for the minimal deposit required to get a mortgage) or take an additional large loan (which the mortgage provider may not like or you'll be unable to get in addition to the mortgage).

    My gut feeling says it's not worth it at £190k, maybe at 170-180k however only you know what you want to do in terms of renovations and how much pain you're willing to endure to make this work (living whilst rennovating is never fun, or you'll need to rent something else whilst carrying out the work).
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