Extending 68 year lease - advice on Freeholders survery report

Miss_La

Hi

I'm looking for some advice on how to negotiate a lease extension with my Freeholder, details of my case are as follows;

1. I own a 2 bed purpose built 1st floor Edwardian maisonette in South London
2. 68 years remaining on the lease with £30 p.a ground rent
3. Have owned property for 4 years so entitled to serve section 42 notice (although currently negotiating informally with Freeholder)
4. Freeholder has had a surveyor conduct a lease extension report and concluded a yield rate of 7%, a value of income stream at £829, a value of reversion at £8696, value of freeholders present interest at £9525 all resulting in a premium of £14,362 to extend lease by 90 years.
5. Value of property without lease extension is £220, 800 (92% relativity) and value with extension is £240,000

How can I negotiate this figure down? Deduct cost of improvements we have made? Debate yield rate?

I've spoken to a few surveyors on the phone who think they could save me a few grand...but I'd have to pay them a few grand for the privilege! Just trying to avoid that and do it myself...is that wise??!

Would really appreciate any help you guys can offer....

Fire_Fox

Have you read the two lease extension articles on the LEASE website? Have you used their lease extension calculator on the first page? http://www.lease-advice.org/publications/

Also are you confident the valuations of your flat are correct, have you looked at land registry sold prices for your street and area and spoken to a couple of estate agents? How much you have spent on improvements is accounted for in the valuation.
www.houseprices.co.uk

silvercar

Value of property without lease extension is £220, 800...
value with extension is £240,000....
a premium of £14,362 to extend lease ....

220,800+14,362= 235,162

so it pays to extend the lease. Added to which it will be easier for buyers to get a mortgage with a long lease.

chewmylegoff

silvercar wrote: »

Value of property without lease extension is £220, 800...
value with extension is £240,000....
a premium of £14,362 to extend lease ....

220,800+14,362= 235,162

so it pays to extend the lease. Added to which it will be easier for buyers to get a mortgage with a long lease.

it's not as black and white as that as (a) the values are estimates and (b) you are obliged to pay your own legal costs and the freeholder's legal costs.

but i would agree that, assuming the property will be sold at some point in the future, it is worth sorting the extension out. if the leasehold premium is "A" and the market value of the property with the extension is "MV" any sensible prospective buyer is likely to offer you significantly less than MV-A because they know that A might change and that they will have to pay the uncertain legal fees and go through the hassle themselves.

Miss_La

Many thanks for your thoughts everyone