60 Years Left on Lease - What options>

matt_m_99

Hi,
I am a first time buyer I have just gone to look at a studio today which was incredibly cheap (sub 40k) the studio itself isnt in a very good state however it wouldnt take much to make the place look nice (new flooring, coat of paint etc). My main concern is the place only has 60 years left on the lease and the estate agent doesnt seem to have a clue as to what would happen next so I'm hoping someone on here might be able to help? I wouldnt have thought I would keep the place for longer than 10 years.

Matt

Kavanne

your solicitor should be able to help. After you have lived there for 2 years you can extend the lease but you have to buy the extension so it will cost you money

I believe you can ask the current owner to initiate the lease extension procedure then hand it over to you to complete once you've purchased.

Fire_Fox

Kavanne wrote: »

your solicitor should be able to help. After you have lived there for 2 years you can extend the lease but you have to buy the extension so it will cost you money

I believe you can ask the current owner to initiate the lease extension procedure then hand it over to you to complete once you've purchased.

What Kavanne said! Lots of advice on leasehold flats, including service charges and lease extensions here:
http://www.lease-advice.org/
Be aware you may struggle to get a mortgage.

Kavanne

at what point does it become a struggle to get a mortgage? we've got about 75 years left and it was ok. Just curious

patchwork_cat

You will find it hard to get a mortage as most want at least 75 years. Lenders vary about how long after expiry of mortgage until end of lease they require. Some requiring as much as 65 years.

You may find that the freeeholder asks a large amount to extend the lease. You can apply for a tribunal , hassle.

cattie

I would be wary of buying a flat with just 60yrs left on lease as I'd be querying why the owner didn't extend the lease to make the flat a more attractive proposition to purchasers & also to achieve a higher value.

Usually when people don't extend shorter leases before selling property, it's because the cost is very high or that there is a problem with freeholder, perhaps an absent freeholder or suchlike.

You can extend leases before you've lived in a property for 2yrs providing the freeholder agree's. He doesn't have to agree though untill the 2 yr ownership period is up & then you have the legal right.

The lease-advice link is an excellent one.

lovethymini

When I sold my flat it had about 68 years on the lease, and during the sale the buyers negotiated with the leaseholder to extend it.

Sometimes it's very expensive to extend a lease, so my advice to you is to get some figures and make sure you're not going to get a nasty shock once you've bought the studio, when it's too late.

Good luck, my first property was a studio and I loved it

typeractive

yep - sound advice on here. I was looking into buying a leasehold property. It had something like 64years left on it. I looked into the cost of renewing this. The seller (distant family) said it would be around a few hundred pounds. I questioned why they hadn't renewed it, and they said the freeholder put a stop on it to my great aunt...whom had lived there for probably over 30years. They had applied twice and been refused. I figured what chance would I have, beign a new owner. After investigation it came back that the cost of renewal was over five grand. This with around seven grand to refurbish the flat made the entire idea a waste of time and money. Doing your research first is crucial, so well done on questionning this all. I was told at the time that under 60/65 years mortgage lenders do not like the idea of lending. I think it has something to do with they prefer 30 years (approx) on the lease once you have paid the mortgage off.

The link to lease advice is a very good source.

Good luck with it all!

matt_m_99

Some very good advice in there thanks alot. According to the guy who lives downstairs in the flat below the place has been empty for the last 2 years and its now a re-posesion? All seems a bit strange. It also has a very high maintenance charge of £900 a year and from the look of it (gardens, hallways etc) they do nothing.

I am now considering buying it as an investment. Putting down 20% getting a 10 year morgotage and renting it out. The rent should near enough cover the morgatge. I would still have enough deposit for something else thatsd a bit bigger. Any views on that?

Matt

PasturesNew

matt_m_99 wrote: »

Some very good advice in there thanks alot. According to the guy who lives downstairs in the flat below the place has been empty for the last 2 years and its now a re-posesion? All seems a bit strange. It also has a very high maintenance charge of £900 a year and from the look of it (gardens, hallways etc) they do nothing.

I am now considering buying it as an investment. Putting down 20% getting a 10 year morgotage and renting it out. The rent should near enough cover the morgatge. I would still have enough deposit for something else thatsd a bit bigger. Any views on that?

Matt

- Most BTL mortgages will need you to have a 25% deposit
- the lack of a long lease will still be an issue for mortgage lenders
- you will need to show them that the rent is about 125% of the interest only of the mortgage to get accepted

So you're still up against that lease, but by going down the BTL route you're making it harder.

penguine

Unless you can get the lease extended before completion I wouldn't touch it with a barge pole.