is it worth buying a place with a 74 year lease

LondonDiva

A friend of mine's looking at a flat and it seems to be quite nice.

Only hang up is that it is for sale with a 74 year lease which seems short to me - is this me or is it an ok buy?

thanks:)

Fitzy29

Depends on the mortgage lender, some want so long left at the end of the term of the mortgage, say 50 years...so a 25 year mortgage wouldn't be workable, you's have to take it over 24. ( ie 74 - 24 = 50 remaining )

The biggest concern is when you come to sell you may have to pay for a lease extension from the landlord/freeholder, can be well expensive, to keep to purchaser happy.

check with a solicitor.

dunstonh

The lease may be able to be extended. The estate agent could confirm if that is a possibility or not.

LondonDiva

Roughly how much should it cost to extend the lease?

Ian_W

There's no way anyone can give a rough guide without knowing the value.
See
http://www.lease-advice.org/levaframe.htm
It's quite a complex calc even with the value so I'd suggest you give Lease a call and they should be able to give you a better idea. Initially though it is a case of negotiations with the freeholder with a tribunal setting the amount if you can't agree.

I'd disagree with Fitzy about lenders - I think, no expert but what I've read on here and some distant personal experience, that most lenders look for the term of the mortgage + a further 25/30yrs before they start getting wary about lending. So over 55 should be OK but the nearer you get to that, the more it will be a concern to potential future buyers when you come to sell.

RiskAdverse100

There is no reason why the property is not worth buying, provided that:

1. The price takes into account that the lease has less than 80 years on it.
2. You have investigated how much it might cost to extend the lease.
3. You are aware of how to go about extending a lease.

RiskAdverse100