60 Years Left on Lease - What options>

cattie

Even if you were fortunate enough to find a lender willing to take a chance & grant you a mortgage,I certainly wouldn't consider it an investment. Wth only 60yrs left on the lease you have a diminishing asset & should you need the money you've sunk into the property, you will find it very, very difficult to unload onto another buyer.

Plus on top there's £900 per year on service charges & these are never going to go down, only up, so sounds to me like you'd just be throwing money away rather than investing it.

Either way, extension of the lease is crucial.

Cazza

Yes, you still want to sort the lease out. If you don't, then it's likely to make the flat very difficult to sell, as future purchasers will be having exactly the same thoughts as you are, but with an even shorter lease (and that's on top of all the mortgage issues too).

Tell the Estate Agent you want to make an offer, pending being given details of the lease extension, it's a fairly easy process when done as part of the normal conveyancing. If they can't or won't get you the details, walk away.

matt_m_99

Some very useful advice thanks alot. I am going to go with the advice of Cazza and all am going to find out exactly whats happening with the lease. The agents keep pushing me for a decision so they obviously cant have alot of interest. I think I will put an offer in a fair bit below the asking price with the condition of knowing the details.
Will keep everyone updated.

Richard_Webster

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.

I agree. With this short a lease there could well be something wrong. How does it compare price wise with other similar properties? If it is cheap then you have your answer.

cuthbert_the_octopus

The shorter the lease the more expensive it is to extend it.

Ours had 56 years left on it when we extended it and it ended costing us £15k.
When a lease is extended, it is possible to renegiotiate the ground rent.

Definitely negiotiate the lease extension as part of the sale, and get a solicitor that is familar with handling lease extentions.

mlz1413

I went to buy a flat and the mortgage I was porting turned it down as it had 54 years left on the lease. They wanted my mortgage term + 30 years, so for most people that would be at least 55 years, a friend who worked in mortgage approvals for a different building society said 75 years min is not uncommon.

The EA got the seller to pay for the extention on the lease which was over £7000 for 25yr extention.

As others have said get the lease sorted before you purchase.

IMO i'd steer well clear £900pa for a building not maintained! I bad management co is not worth getting involved with, cheap does not always mean bargain.

Richard_Webster

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?

I'd not spotted this before. If this is the case the repossessing ender's solicitors are going to be the slightest bit interested in helping you get a lease extension. You either buy it as is or leave alone. I would leave alone.

Fire_Fox

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.

Matt

£900 a year seems quite cheap for a service charge: what are others in the area? Be aware that poorly maintained communal areas make for poor quality tenants or even no tenants at all - my building is in exactly that position, with the flat next to mine empty now for over two years!

You must ask the management company what major works are planned for the coming few years as you don't want a shock extra bill if/ when they do redecorate. If a fire escape or lift needs replacing that will cost you thousands of pounds.

You really need to understand what is covered by the service charge - lift maintenance is very expensive, fire alarm testing/ extinguishers/ fire escapes, buildings insurance, ground rent, electricity for the interior and exterior lighting, caretaker/ cleaner/ gardener, percentage for the managing agents, etc.

Once you know the legal position it's fairly easy to question the service charges/ level of care, but you may or may not get a response! I have been disputing mine for two and a half years, with my last letter ignored for eleven months. If you can buy the place for a song AND are willing to put the legwork in chasing the managing agents AND hang onto it for ten years you may well make a killing.

ad44downey

matt_m_99 wrote: »

The rent should near enough cover the morgatge.

Famous last words those.

Entertainer

If the rent is barely covering the mortgage then it isn't a good investment. And that's before the lease "issues".