Lease Extension on flat with 16 years left - help please

Londonbuyer_3

I live in london & i'm looking at buying a studio flat, i have seen one that fits the bill, perfect location, cheaper than it should be (because only 16 years left on the lease) it is in a portered block in central london. I am looking for a rough estimate of how much it should cost to renew the lease. So i can find out whether it is a worthwhile investment. Also if anyone knows any things i should watch out for it would be much appreciated.

silvercar

Unless you can arrange for the lease to be extended at the time you purchase, you won't be able to get a mortgage.

pizzagirl

Londonbuyer wrote: »

. I am looking for a rough estimate of how much it should cost to renew the lease. .

You should ask the estate agent in the first instance.

suze_g

My seller had only 62 yrs left on her lease which she extended for £18K

charliee_3

wow... that will cost LOADS....

PasturesNew

Calculator to give you a rough idea:

http://www.tenancy-agreements.co.uk/lease.php

Beardmidget

As others have said, the cost is probably going to be astronomical!

The problem with buying on a short remaining lease is that the apparent cheapness is pretty much the market value less the cost of the extension- so you'll not be saving anything and the reality is a great big headache during the buying period.

Doozergirl

Mmm. Central London. Central London freeholders known to be exceptionally litigious. Cash buy only and an extortionate bill for the extension, | bet.

Auzelia

Why do you need a lease?

Is it the same in scotland?

Beardmidget

Auzelia wrote: »

Why do you need a lease?

Is it the same in scotland?

Not sure about scotland but for flats in England it was not possible (until a few years ago) to have multiple owners of the same plot of land, who also owned separate and discreet piece of property on that land. If you imagine a stack of five flats on a piece of land- then you will be able to imagine that each flat covers exactly the same piece of land- creating a legal problem.

Therefore, in a block of flats it is normal for a leaseholder to retain ownership of the land and building, but to lease the individual flats to people for a long period of time (e.g. 99 years). This lease is a bit different to shorthold leases which are granted when one is renting a property but they are based around the same concept in law.

Long leasehold offers the 'owner' of a lease (i.e. the owner of a flat) much of the same rights as owners of freehold properties- though there may be restrictions e.g. on the use of wooden flooring to reduce noise. They are also able to force an extension on their lease for a fee- which AST tenants renting a property cannot.

Leaseholders will have to pay a small sum in rental to the freeholder (peppercorn rental- paid to avoid legal problems for the freeholder), as well as being required to pay management fees for shared areas in the building.

Many regard leasehold property a good way of creating easy money for freeholders, hence the recent legal moves to place ownership into the hands of those actually living in this type of property.

Richard_Webster

It is normal for a leaseholder to retain ownership of the land and building, but to lease the individual flats to people for a long period of time (e.g. 99 years).

Leaseholders will have to pay a small sum in rental to the freeholder (peppercorn rental- paid to avoid legal problems for the freeholder),

Can we get the terminology right?

Leaving aside the more complicated case where there is a hierarchy of leases, in most cases it is the freeholder who grants the long leases and the person who gets that lease and "owns" the flat is a leaseholder.

And if OP needs a mortgage he won't get one on 16 year unextended lease and if he doesn't need a mortgage it is still and exceedingly risky exercise, which could cost a lot more than he thought in the long run. I would leave well alone.