Found a dream Flat, but lease putting me off, please help

jackieblue

Hi Chikoo77,
You're right - the price quoted is the current one but if you read earlier advice I received on MSE the damage was already done once it got below 80 years, so this gave me a fair indication of what they would ask in 2 years' time. I don't know if you've seen the calcs, but what shoots it up when there is less than 80 years is that the leaseholder is then entitled to 50% of the increase in the property valuation (not general increase, just the increae in value that having a longer lease again gives it)

My solicitor didn't feel there would be much of ain increase in 2 years time, bt did say if I had any doubts I could speak to a valuation expert - which I decided not to do.

I'm in Hants/Surrey borders. It's a one bedder very close to a town centre which I paid £116k for. It was fairly priced - though not a bargain. Hope that helps.

chikoo77

Thanks for your reply again jackieblue. Its really nice of you.

I will try and ask my solicitor to find out the details as you said..and go from there.

I am really thankful to everyone again as your advice has definetely helped me a lot in how to proceed from here. Will keep everyone updated what happens next.

Thanks.

Robert_Sterling

natwill wrote:

1) go on to nethouseprices or similar and find what she paid for it

What somebody paid for anything is not relevant.

tazgirl

Just to add - we've just exchanged to sell a flat with a lease length of around 75 years (so a little longer than the one you're interested in, but not much). Our buyers solicitor was able to get a quote for the lease extension from the freeholder, without us even having to be involved - so your solicitor should be able to get an estimate of price even if the current owner isn't interested. There is usually a small fee for this. The details of the freeholder should be provided by the seller if you want to go ahead - she would have to will in a form giving all the information as part of her paperwork to sell.

It will cost you slightly more to extend in 2 years time, than a quotation based on today - as I believe the cost is in part calculated on the number of years remaining (very complicated way they have of working it out), but unfortunately it is part of the regulations that you have to have owned the property for 2 years before you can extend.

We priced the flat to take account of the cost of the lease extension, and our estate agents were used to doing this as we're in a development with a number of flats in a similar situation. Depending on if the flat your interested in is one of many, it might be worth speaking to the estate agent and asking if the price reflects the lease length, and what they'd value it at with the longer lease. They might also have an idea of the cost of lease extensions for similar properties.

Worried

I am trying to get the vendors of the flat I'm buying to extend the lease for me as they have been there 2 years plus (so have the legal right to an extension) and the lease is about to fall below the magic 80 years. The vendor isn't willing to pay the fee for finding out how much the freeholder wants, so I am footing the bill for it. It's costing me £352.50. My solicitor says this is a payment to the management company and it is the usual price in this part of the country (S.E. london). It is the cost of getting someone in to value the lease and it's being paid to the management co., as obviously they handle all this for the freeholder. Whether they actually do get someone in to value the lease, or whether they pocket the money and pluck a figure out of the air, is hard to prove.

I would say def. get the vendor to find out how much it will cost to get a quote for the extension and then get her to pay it if you can. She is going to face a lit of questions about this from potential buyers and should be armed with the facts. If the freeholder won't even entertain getting a valuation done for her, or if she seems unwilling to stump up the cash for the valuation, then it doesn't look like you have a co-operative freeholder, or vendor, which is never good news.

I know it's hard when you find a place you love, but if you're really serious about going for this place, you need to get armed with the facts of how much the lease will cost to renew and then think about the price you'd be playing for the flat. If you don't feel the flat is priced to reflect the short lease, then I hate to say it, but I wouldn't go there, or try your luck and put in an offer that reflects the length of the lease and the cost of extending it. I wish you lots of luck!

Worried

Also... take with a pinch of salt any estimate the estate agent gives you for the cost of the extension!

PJD

Cheers Jackie -
Yes, I do remember you & the conversation, I actually asked on the other thread if you could give me the companies contact info, quite a while after the thread had died.. - I thought I'd catch you again here!

Thanks for the info

lukemed1

Don't mean to rub it in mate but i was a bit nervous about buying our flat as it was leasehold, until i found out the lease was for 999 years! RESULT! seriously tho anything with a lease under 100 years i wouldnt touch with a bargepole!!

good luck tho!

best wishes

Luke:beer:

aloiseb

QUOTE: "Whether they actually do get someone in to value the lease, or whether they pocket the money and pluck a figure out of the air, is hard to prove."

Come on- this is a managing agent we are talking about here!
(sorry if there are any honest ones reading)

Imelda

Hi all,

I bought a flat last year with about 80 years on the lease, I am intending to sell in about 2 years time, would you suggest that I get it extended before I sell (and would this give me a better chance of selling at top asking price?) or wait until I am selling and discount the price of the flat accordingly?