FTB after a bit of leasehold info

emg

I'm interested in flat with 77yr lease. I've browsed old threads and realise that it could be expensive to extend this. I plan to ask the vendor to obtain a quote for extension. Would the normal process be to do this before putting in an offer or would I be better putting in an offer first to show I'm interested and then negotiating a new price when I get the information? To be honest, if it is too expensive then I will probably walk away.

Also, what are the restrictions on leasehold flats (do they vary greatly)? If I wanted to change the internal layout of the flat would I have to notify the freeholder? (The flat I like could do with a partition wall to make a better entrance hall - I'm not talking major structural work!)

Hope someone can help!

Joe_Bloggs

You would be talking to the estate agent for the vendor. Phone them up and let go with your opinion. Why offer any money on something that you may not be able to sort out for two years yourselves and could cost several thousands maybe more.
Perhaps wait for the views of other forum members, rather do anything I suggest in haste.
J_B.

EdInvestor

Ask to see a copy of the lease to determine whether there are any restrictions. One to check on is whether you have to get permission from the freeholder to let the property. This can lead to freeholders charging big fees everytime a tenant moves in, if you decide to use the place as a BTL later.

Don't leave checking the lease to your solicitor.Often they miss important aspects, especially if they don;t deal with many flats.Go through it yourself with him to make sure you understand every point.

nickgatt

emg wrote:

I'm interested in flat with 77yr lease. I've browsed old threads and realise that it could be expensive to extend this. I plan to ask the vendor to obtain a quote for extension. Would the normal process be to do this before putting in an offer or would I be better putting in an offer first to show I'm interested and then negotiating a new price when I get the information? To be honest, if it is too expensive then I will probably walk away.

Also, what are the restrictions on leasehold flats (do they vary greatly)? If I wanted to change the internal layout of the flat would I have to notify the freeholder? (The flat I like could do with a partition wall to make a better entrance hall - I'm not talking major structural work!)

Hope someone can help!

Hi.

I was in a similar position and can only tell you what was advised. BTW, my completion date is still a week away so it is not all done and dusted yet. Plus I still have some questions of my own!

All advise I received was to put an offer in now. If you can, get the place taken off the market if you're sure "it is the one" pending all questions are answered in a positive way for you.

Get the seller to start the process of enquiring about the 90 yr lease extension which I'm told can take a while depending on freeholders backlog. (Other protential buyers will mostly be asking the same questions unless they are cash buyers looking for a quick buy-to-let)
There may be a fee associated with this - the freeholders of my potential purchase charge 350 plus VAT.

Regarding layout changes - I'm in a similar position too as I want to remove part of an internal structural wall. This can vary from property to property but at the very least you'll have to get the lenders approval (for anything other than minor changes or bathroom refits) for things like conversions, windows, supporting walls etc. You may need local planning permission and the freeholder will need to approve.
A quick indication for things like loft conversion is to look at the neighbours! If none have them it may be a no go...
Lastly, use registered tradesmen so when you sell you can demonstrate things were done properly and not by the local cowboy!

Hope this helps!

emg

Thanks for all your advice.

I just did a second viewing this afternoon. According to the EA he thinks the lease is not a big deal in terms of mortgage lenders or anything. I said that I'd like the vendor to get a quote to extend as I was aware that it could get expensive if the lease was below 80 years and that if I were to sell in 5 years time it would be tricky with such a short lease. The EA seemed unaware that lease extensions were more expensive when they were below 80 years, he even said "I dont think that's true!" (I resisted the urge to point him towards this site!)

Anyway, despite apparently none of the other viewers asking about lease extensions he was aware that the Freeholder actually lives in the block of flats but is away on holiday at the moment. I said I would like an idea of cost of extending the lease and that if it seemed a reasonable amount then I would put an offer in. Apparently the vendor has already rejected several offers that she considered too low and is not in a big rush to sell so I guess she's not going to offer much discount for a lease.

I'm trying not to get my hopes up but suspect I will be after more advice soon....

chivers1977

I know that Woolwich are happy so long as there is 25 yrs lease remaining at the end of the mortgage term.

Doozergirl

The cost of a lease extension doesn't suddenly hit the roof at 80 years the way that some will have you think. Yes, it will increase slightly, but the significant part of the cost of your extension is based on the value of the land the property stands on ie. the amount of ground rent you pay each year.

Virtually all mortgage lenders will accept over 70 years and many, many people will buy a leasehold flat without the first clue about what the remaining term means to them, so your vendor may not experience a problem selling to someone else.

I agree with nickgatt, agree a price and ask the vendor to get a price for the lease extension. I'd also ask for the freeholder to indicate whether they would sell you the lease extension as soon as you have bought the flat, rather than wait for your vendor to get it sorted before you buy the flat, or wait the two years yourself.

Putting up a stud wall wouldn't be seen as a permanent change to the flat, so I'm sure you could do it without a problem.