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Extend Your Lease guide discussion

MSE_Jenny
MSE_Jenny Posts: 1,312 MSE Staff
First Post First Anniversary Combo Breaker
edited 2 March 2012 at 1:59PM in House buying, renting & selling
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Hi all, we've written a new Extend Your Lease guide to help you extend at a fair price.

How did you find the info? If you've done it, how did it go and do you have any other tips you'd add? How much value do you think it added to your property?

Thanks
for your help!


MSE Jenny
«13456783

Comments

  • richardw
    richardw Posts: 19,458 Forumite
    First Anniversary First Post
    Do freeholders have an obligation to write to lessees when their lease is say 83 years about how they can extend their lease?
    Posts are not advice and must not be relied upon.
  • There is no obligation by the freeholder to alert lessees to the wasting term of the lease. This is entirely the lessee's own responsibility as it is their asset to protect. It is therefore essential to make sure that you apply for an extension to the term - either by negotiating with the freeholder or through the statutory route - before that 80 year date passes otherwise it will become much more expensive!
  • Bowski83
    Bowski83 Posts: 5 Forumite
    Just spoken with the freeholder of my flat - this has prompted me to extend lease - only 61 years left. They have said they will send me a quote and ask me to send them details of the no of bedrooms and current market value. There are about 5 flats for sales in the complex and their prices range by about 10k - do I use the lowest or the highest. My thoughts would be to use the lowest.
  • My elderly mother needed to extend her lease on a flat worth roughly £145,000 which had only 55 years left to run. The landlord (an obscure company) told her the cost would be £24,500. She nearly paid but we got advice from a solicitor who said that the figure was far too high and we should challenge it using a specialist. We did and this involved a total of about £800 in expenses and some tough negotiating with threats to go to tribunals to resolve it. The final figure accepted by the landlord was £18,300. So my advice is to get help from a trusted solicitor. Incidentally it seems that tribunals look at the cost of similar settlements to work out what a fair figure would be, so the more people who pay the high prices demanded by landlords the more ammunition the landlords have to base their figures on.
  • Go for the lowest quote and your landlord will no doubt go for the highest one when working out his sums. But don't accept his calculations as correct as there is a lot of complicated calculations which need to be applied including yields on term and reversion, ground rent, relativity, local previous tribunal case decisions, etc. Get advice as suggested in my post below, it could save you thousands.
    PS I have no connection whatsoever with solicitors or chartered surveyors and base my advice on my own experience of extending the lease over a year ago.
  • richardw
    richardw Posts: 19,458 Forumite
    First Anniversary First Post
    edited 7 March 2012 at 7:06PM
    Bowski83 wrote: »
    Just spoken with the freeholder of my flat - this has prompted me to extend lease - only 61 years left. They have said they will send me a quote and ask me to send them details of the no of bedrooms and current market value. There are about 5 flats for sales in the complex and their prices range by about 10k - do I use the lowest or the highest. My thoughts would be to use the lowest.

    If you think others are likely to want to extend their lease, perhaps consider getting together and liaising with a leasehold practitioner http://www.alep.org.uk/
    Posts are not advice and must not be relied upon.
  • I wonder if someone could give me some advice. I am in a real quandary as what to do. I have a maisonette on a 60 year lease worth about 125,000 paying a ground rent of £70 per year. Ireally want to extend the lease but my lender Barclays / Wooolwich will not allow me to borrow any more money . I ahve a mortgagre of £98000. The guide says do not borrow any money on loans , credit cards to finanace it. However if i leave it , the cost of lease extension will go up with time running out on the lease ? Any help gratefully received.
  • Richard_Webster
    Richard_Webster Posts: 7,646 Forumite
    First Anniversary First Post Combo Breaker
    I wonder if someone could give me some advice. I am in a real quandary as what to do. I have a maisonette on a 60 year lease worth about 125,000 paying a ground rent of £70 per year. Ireally want to extend the lease but my lender Barclays / Wooolwich will not allow me to borrow any more money . I ahve a mortgagre of £98000. The guide says do not borrow any money on loans , credit cards to finanace it. However if i leave it , the cost of lease extension will go up with time running out on the lease ? Any help gratefully received.

    How long ago did you buy it?

    If fairly recently then did your solicitor advise you that it was likely to be expensive the extend the lease and you would probably need to do so in order to sell? If you bought recently and he didn't then you might well have a claim against him.
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
  • CrispyUK
    CrispyUK Posts: 230 Forumite
    First Post First Anniversary Combo Breaker
    The article seems to miss the fact that in doing this via the statuatory process you also reduce the ground rent to a peppercorn (effectively nothing) so if you're planning to stick around then there's a saving there (in addition the potential enhancement to resale value).

    Does anyone know how things work when your lease specifies scheduled increases to ground rent? I was looking at a Taylor Wimpey apartment but when researching the whole leasehold situation I found a number of discussions where TW's standard lease starts with a ground rent of £250 pa, which doubles every 10 years. On a 125yr leasehold this would ramp up to a ground rent of over £1 million per annum for the final 5 years of the lease.

    Presumably this has to be accounted for the the calculation of the lease extension price - is there a standard way of working this out??
  • Hi Richard,

    Thanks for your comments. I bought it in Sept 2006, my recollection is that i was not advised to extend it at the time of purchase.
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