Extending lease on a flat

jamborino

I have a 60 year lease on my flat and have recently made enquiries with the freeholder/landlord about extending the lease to 99 years (which was the original lease term when the lease was first granted).

They have quoted me a £ amount to extend the lease to 99 years but I have no idea how that amount has been calculated. I'm assuming/hoping the landlord hasn't just plucked a figure out of thin air, and that there is some sort of scientific or standard basis for calculating this sort of thing (taking into account things like current market value, number of years left on lease, etc??).

Are there any property experts out there who could clarify this please?

TIA

Kavanne

what is the amount out of curiousity? what is the approx value of your flat? i think it has something to do with the value of the flat before the lease extension and after it? I am not sure though

Doozergirl

There is a calculator here but it the value of the extension really is a very subjective thing. http://www.tenancy-agreements.co.uk/lease.php
The yield you need to put in is 4.75% for a flat.

What the value is with the lease extension is hard enough to guess without working how much having a short lease devalues it by. Your freeholder will want your flat to be worth a lot with the extension and not very much without it, you will want the opposite.

To be fair, they should have an independent valuation carried out.


Whatever price they have given you, you should haggle with them.

Richard_Webster

If you have had the lease for at least two yaers you are entitled to a 90 year extension (to 150 years) at a nil ground rent under the statutory provisions. The lease extension formulae on websites tend to assume this. If you are only being offered an extension back to 99 yaer possibly with an increased ground rent then the figure you pay the Lessor should be less.

Problem is that it can cost around £3-4K to take the matter all through the Leasehold Valuation Tribunal if the Lessor won't agree something reasonable, so you may end up accepting some terms that are not ideal to save this cost. You will need specialist advice. Unfortunately surveyors who do this kind of thing are unlikely to do very much at all for less than £500 plus VAT and it will probably be much more.