lease calculation

muzsunset

Hi this is my first post,would appreciate any help.

I have recieved price of £28,000 to extend my lease.

Also the ground rent jumps to £150 per annum.

The above price is for a new lease of 99 years comencing now.

I know I have a right to a 90 years extention onto the remaining lease of 53 years. ie 143 in total

The lease advisory calculator does not work for leases less than 60 years

The property is worth £250000

The current ground rent is £15 per anum

There is 53 years remaining on the current lease.

Could anyone help me decide if the shorter lease offer is fair

Thanks

GDB2222

It's a touch expensive IMHO. They are using a discount rate of around 4%. My recollection is that there were some cases where the tribunal decided on a 5% discount, but I can't remember the references any longer. Your surveyor should know these cases well.

Doozergirl

What does the lease advice calculator say at 60 years?

The property is worth £250k when? With a decent lease? It is quite heavily devalued now.

The calculation is always going to be subjective as the value of the property without the extension is, in reality, going to be the final value minus the actual cost of the lease extension. So how you work out the value of the lease extension based on the marriage value calculated on the value without an extension defies logic!

I mean £28,000 doesn't sound unusual but the entire concept of having leases that are longer than a lifetime seems totally unfair to me. (And I say that as a freeholder who has children who will probably end up with quite a windfall when they are 70 years old if they can remember that mum & dad own freehold somewhere. No doubt the memory of it will go with my own marbles eventually)

GDB2222

I took the £250k figure as the value with the extended lease. Perhaps the OP could tell us.

muzsunset

The £250,000 would be the value of the property with a new lease

Thank you

muzsunset

Hi

Not sure what value to put into lease advise calculation for value with present lease. Anyway put in £200k with 60 years remaining (why it wont let me work out 53 years I dont know). Comes up with 18k to 23k.I imagine this is 90 years onto the 60.
Thanks

Doozergirl

So the freeholder's request is probably at the top-ish end of the scale considering that the lease is now at 53 years...

The difference in lengths (plus 90 or back up to 99) doesn't appear to affect the cost of a lease extension very much - it didn't when we extended one (we tried to negotiate the length downwards to make it cheaper; which it did, but not by all that much). You can negotiate with the freeholder to bring the price down somewhat. There may not be any point in you negotiating to extend it beyond 99 years unless you plan to stay where you are for a very long time. I'd try to get the price down a bit.