Expensive leasehold

lease_man

Hello all. We are a couple of FTB and are looking to get your valued opinions in our situation.
After looking around for a while found a place we really loved and made an offer, subject to information about the leasehold ie how much to extend as was only at 69 years. After our offer was accepted (187, 500) the EA and vendor were both very reticent on the subject and it took a few weeks to get the information from them. On finding out the amount we could see why.
The freeholders wanted 21k to extend to 99 years, which even as FTB we realised was outrageous. Everyone we spoke to, even the EA and vendor were shocked at the amount.
We thought about it and decided to lower our offer by 14k, and if they told us to get lost we would move on. They actually entertained the idea for a week then said no. ANYWAY the thing is we really love the place, and would be prepared to up our offer by another 5k but we have no idea what we would be getting into with the leasehold.
So if we took this to a tribunal how likely are we to get a fair price for the lease? I understand it could take a while and legal costs involved can be pricey but surely a fair decision would be well below the 21k?
thanks

tomstickland

I'd prepare to find somewhere else TBH.

Doozergirl

https://www.lease-advice.org has a section which gives you an idea of how you value a lease extention. There is no way I can see a lease extention costing £21k.

Do you know what the ground rent is each year and what the flat would be worth with a full 99 year lease? The value of the lease is worked out using lots of strange decimals and the two figures I mentioned. The vast majority of it is made up of the 'marriage value' which is the difference between what the flat is worth now and what it would be worth with the extention. You have to pay 50% of that to the freeholder. At £21k, the freeholder is out of their mind. They are suggesting that the property would be worth over £40,000 by extending the lease. That's rubbish.

If you can get a decent price on it using the £21k as a bargaining tool, take advantage. If you're going to be keeping it for 5 plus years, I'd buy it and go to tribunal and you'll get a much, much better figure from the freeholder.

I'm currently looking at a flat with 67 years left to run and a ground rent of £15pa. Using the lease-advice I made a guestimate of £6k, but my solicitor thinks more like £3k. The freeholder will obviously think more, but there's a definate upper limit and it's nowhere near £20k!

(1,001 and having a party by myself _party_ where are my MSE friends )

tazgirl

Yes, that does sound high. We're currently selling (fingers crossed) a flat with around 72 years left on the lease and have a price from the freeholder for a lease extension to 99 years of around £17k. We're selling with the offer in place, and the buyer can decide if they want to take it up or dispute it at tribunal. We did get an offer to buy the share of freehold at around £20k per flat, but obviously that's higher as they take in to account the loss on ground rent over the remaining years of the lease.

Also worth checking if the ground rent changes when the lease is extended - we're currently paying £180 a quarter (don't ask!!), but with the lease extension it would drop to £250 a year, so the buyers would save as well as increasing value of flat.

We did accept a lower offer that we really wanted on the flat to get shot of the lease situation, as it was putting off a lot of FTBs, but then we were very upfront about it and made sure the EA mentioned it at an early stage so it didn't come as a suprise to buyers - mind you, our freeholder has something of a reputation as a bunch of theiving gits... even our solicitor groaned when we mentioned their name!