Lease..56 years left...help please

chickmug

cattie wrote: »

Thank you chickmug for having a fully functioning brain.

I must show my wife this as she keeps telling me about my senior moments:cool:

mwahaha

I'm very,very surprised that Shenstone is offering the freehold at only 4,500, that's remarkably small for 56 years on a property valued at 160k. And they're not your naive freeholder who doesn't know the value.

Is there something I'm missing? If not you or your prospective purchasers should be biting their hand off! And as others have said you might do better to purchase yourself and remarket as freehold if the sale isn't urgent.

Fire_Fox

RobbieS wrote: »

We have checked with Shenstone and it will cost £3.200 to extend for 125yrs, and £4.500 to buy lease. Its a bungalow by the way. Thanks for the advice.

Yes but you will need a cash buyer, which massively reduces your pool of purchasers in an already slow property market. Therefore the property will worth substantially less than what you want it to be worth.

PasturesNew

You should buy the lease now, yourself. If you can find a cash buyer they'll still beat you down on price because of the lease. They can't just buy the lease extension, they would have to wait until they've owned it two years, by which time the price will be higher.

Remove all doubt - and buy the freehold/lease yourself.

RobbieS

mwahaha wrote: »

I'm very,very surprised that Shenstone is offering the freehold at only 4,500, that's remarkably small for 56 years on a property valued at 160k. And they're not your naive freeholder who doesn't know the value.

Is there something I'm missing? If not you or your prospective purchasers should be biting their hand off! And as others have said you might do better to purchase yourself and remarket as freehold if the sale isn't urgent.

I got this price by telephone from Shenstone. Do you think they could be trying to mislead us for some reason? We rang twice and spoke to two different people. What do you think.? It will cost us £50 to get it in writing.

**Upsy_Daisy**

You are enttled to a 90 year extension provided there has previously been no extension.
You will need a solicitor.
Looks like they'e offering you a good deal - they could add in the "marriage value" which is essentially a (usually large) % of the increase in the value of the property that extending the lease will give

Start with the lease link above

cuthbert_the_octopus

It sounds a bit cheap to me!

Our lease extension on a £165k flat cost us £15k including all the legal paperwork. You also have to pay for the freeholders solicitor etc etc. We got a new 125 yr lease, and the ground rent increased from £10 to £100 per year.

I would do the lease extension as part of the sale, this will open up your pool of buyers, and not just limit you to cash buyers.

An example of the differences in prices, we sold for £165k, but just after we sold a flat without lease extension came onto the market and eventually sold for £130k.

RobbieS

They told us it would be a 125 year extension for £3.200 but ground rent would go up from £15.00 per year to £115 per year then double every 25 years.

bingibongi

& who is going to pay the solicitors costs in all this - you probably - your own and the landlords. Oh and valuers costs ?

mwahaha

RobbieS wrote: »

I got this price by telephone from Shenstone. Do you think they could be trying to mislead us for some reason? We rang twice and spoke to two different people. What do you think.? It will cost us £50 to get it in writing.

The statutory 90 year extension that other people have mentioned for your flat will cost more than 20,000 + costs. That's why I'm surprised and wonder if there has been a mix-up, so getting it in writing would at least clear that up.

There's no real reason to mislead you. It may be in their interests to delay you extending the lease since the cost increases as it runs down, but I doubt that's what they're doing.

If you want an accurate estimate of the cost of the statutory 90 year extension the nice people atlandlordzone can help, but if Shenstone are really offering 3,200/4,500 then extend/buy the freehold at those prices rather than the statutory extension ASAP!

BTW, the doubling of ground rent every 25 years isn't unusual or concerning if you choose the extension.