Only 3 years left on lease

dmeagor

My parents have just inherited a small house but it's only got 3 years left of a 100 year lease.

Does anyone have any thoughts on what they could do? Is the house pretty much worthless because of this (it's in need of substancial modernisation?)

Thanks
Dave.

Gem_

If they want to keep the house / extend the lease then they need to contact the freeholder to ask how much they would charge to extend it.

Otherwise yes - pretty worthless I would think?

jammyjam

There will be a clause in the lease which states that the Lessee must surrender the property to the Lessor at the end of the term of the lease (or words to that effect). The property is practically worthless to your parents unless they can extend the lease. The Freeholder has to extend the lease if requested, but they can charge a nice fee (I extended the lease on my previous flat from 65 to 99 years which cost me about £10K including fees). It could be that the land is now worth more (redevelopment value) than the property on it, so the costs of extending the lease and doing the refurbishment may be prohibitive for your parents. In which case they should forget about it. The first stage is to find out what the cost of extending the lease will be. Your parents need to ask the Freeholder via their respective solicitors.

pricedout_1

sorry - silly question, but if it's a house isn't it freehold anyway? I thought flats were leasehold and houses were freehold ?

mjdh1957

No, you can have houses on leasehold as well.

All it means is that the owner has in the past let it out to someone on a long lease of 100 years rather than the more usual modern short term.

In the past, long leases were common.

Robert_Sterling

A relative has a flat in London with a 999 year lease.
Started about 1998 ends 2997.

oscarsacco

Robert_Sterling wrote:

A relative has a flat in London with a 999 year lease.
Started about 1998 ends 2997.

This kind of leasehold is often called 'virtual freehold'.

deary65

If your Parents chose, or, other family member to live in the house as your principal residence, then the leasehold would fall into a statutory assured tenancy with all the protection afforded thereof.

chant1l

Ask the freeholder how much he wants first, there are things called land tribunals which can be used should no agreement be reached. The resulting charge will always be cheaper than buying another house, try to buy the freehold if possible...

silvercar

a short lease makes an ideal property to rent out, in that you will obtain a market rent which will be a high percentage of the market value of a short lease.

there are tax advantages of a property on such a short lease in that you are effectively acquiring a capital loss (its value being zero in 3 years time). they may well be a market for such a property; anyone desparate to offset capital gains may pay well over its notional value. how you market this, I haven't a clue!