Leasehold flat question

secondtoughest

I'm in the process of buying a 2 bed leasehold flat.

The estate agent told me it was a 999 year lease and that only a couple of years had elapsed on it. When the survey came back, it said the remaining time on the lease was only 70 years! My mortgage lender (Yorkshire) will still lend but I am worried.

I will contact my solicitor on Monday to see her take on this is. But am I right in thinking that it may cost me close to £10k to extend the lease? In which case should I go back to the seller (Halifax, as it's a repossessed flat) and ask them to drop the price so I can re-coup some of this potential outlay? I am paying £87k for it.

continualdiamond

Im in a leasehold flat with now 75 years left, had 78 when i bought it.

They arise problems re mortgage wise when they have around 50 years left on the lease, at least this is what i was told and my lender is yorkshire building society. The longer lease they have, the more money they fetch. But from personal experience i think estate agents just put whatever they feel down for the lease, as i had this problem with mine, was advertise with a 85 year lease, didn't know they were wrong until i had my survey done as well. Just lucky that yorkshire were okay about it and just had to re adjust some paper work.

I tried to extend my lease before i bought it, but the seller wouldn't do it. I don't know if they differ depending where you live, but for me i had to live here for 2 years before i could apply to extend it. I haven't done it yet.

secondtoughest

Are you planning to extend your lease? Are you concerned about potential re-sale/re-mortgage issues?

Doozergirl

I would renegotiate based on that information unless you think you've still got a deal. Yes, the bill could be 10k for the extension.

Below 70 years is really where the price of the property starts to be affected - when you come to sell you will encounter issues.

The lender won't extend the lease for you - you'll have to organise that yourself. The time constraints within which you have to complete on a repossession means that I bet you won't have time to obtain a valuation on the lease from the freeholder.

If a property has a share of freehold, it can still have a short lease which may not be so much of an issue, although it will still need extending. Just check with your solicitor that the EA hasn't confused share of freehold with a new 999 year lease. Honestly, they are quite often clueless about this sort of thing.

secondtoughest

I realised I've have to extend the lease myself - can the freeholder 'refuse' so to speak? Can I take it as a given that at some point I can extend it if I want to?

- The survey said 70 years - would they get this from the EA?

Doozergirl

secondtoughest wrote: »

I realised I've have to extend the lease myself - can the freeholder 'refuse' so to speak? Can I take it as a given that at some point I can extend it if I want to?

They can refuse for the first two years after your take ownership - there's not much reason for doing that though, most freeholders would be chomping at the bit for a nice lease extension. After 2 years you are legally entitled to have a lease extension of another 90 years, I think it is.

continualdiamond

secondtoughest wrote: »

Are you planning to extend your lease? Are you concerned about potential re-sale/re-mortgage issues?

I haven't looked into extending my lease yet, purely cos i know it will be expensive and i haven't got that kind of money, but is on my to do list.

Reassuring though is a flat sold about 3 mths ago, across from me and up (purpose built flats, ground floor and 1st floor) and they got £90,000, i paid £82,000 2 1/2 years ago. Flat a few doors down is on the market for £92,000.

I can't sit back and worry though about potential re-sale and re-mortgage issues. A place is only worth what someone is willing to pay, but i do keep my eye out on what my neighbours get.

I just focus on the now,cos i went for a fixed rate and haven't had the worry like a lot of people have during this crisis on being able to pay my mortgage and that at the moment is my main concern, being able to keep a roof over my head.

I would love to have the freehold, but you need 50% of the occupants to agree to it.

Doozergirl

continualdiamond wrote: »

Reassuring though is a flat sold about 3 mths ago, across from me and up (purpose built flats, ground floor and 1st floor) and they got £90,000, i paid £82,000 2 1/2 years ago. Flat a few doors down is on the market for £92,000.

But had they extended their leases?

continualdiamond

No, from everyone i have spoken too, which is a few people living around here, they all have the same amount of years as my place does.

That ranges from my old next door neighbour who moved 3 mths ago, a person who purchased about 8 mths ago and was asking us general q's when he came to view the property, the lady who has hers on the market now and my next door neighbours who rent it off their daughter.

If i suddenly see one on the market for over £95,000 then i'll be suspicious of them increasing the lease as not all the flats are up to the same standard, some without double glazing etc etc.

secondtoughest

continualdiamond wrote: »

A place is only worth what someone is willing to pay.

Agreed, but if a mortgage lender potentially won't lend to anything under 70 years then there's going to be a huge problem when it comes to re-sale surely?

Or will you extend the lease by then?

Doozergirl

I've just re-read that it was on your survey - I don't know where they got that from - usually I'm sure it's your mortgage application. The surveyor doesn't have sight of the lease documents so you might just want to find out exactly how long the lease is.

You should be able to download the relevant documents from the Land Registry for 3 pounds if you're keen now.