Extend Your Lease guide discussion

cfcboy

Only just noticed ive got 71 years on my leasehold and now seriously worried!! There is no way i can afford to pay for an extension of a lease anytime soon but is there is a way but im looking to move next year to a cheaper house by the coast.

Is there anyway i can stick a caveat in when selling that i will use equitiy from the sale to extend the lease? So by doing this i keep my house vaule but pay for the lease extension off the sale of the house?

Thanks in advance

murphyabu

Hi all,

I'd just like to pick your brains regarding extending out lease informally through the freeholder,

We own a flat valued between £120-130,000

Our current ground rent is £90 per annum

We have had a quote from the leaseholder for a 125 year term and that this would cost £3,500. This seems reasonable and we are happy enough.

They have said however that ground rent will now be £150 and double every 25 years. Does that seem a bit steep to anyone else? Is there a way in which ground rent is calculated?

Thanks

SKPatel

cfcboy wrote: »

Only just noticed ive got 71 years on my leasehold and now seriously worried!! There is no way i can afford to pay for an extension of a lease anytime soon but is there is a way but im looking to move next year to a cheaper house by the coast.

Is there anyway i can stick a caveat in when selling that i will use equitiy from the sale to extend the lease? So by doing this i keep my house vaule but pay for the lease extension off the sale of the house?

Thanks in advance

Hello!

You can try and agree to complete your lease extension at the same time as you sell your flat thereby using the sale proceeds to pay for the lease extension.

Alternatively, if you cannot agree terms with your freeholder for the lease extension, you can serve a formal notice on the freeholder and the buyer can then continue with the lease extension after they are purchased the property.

Good Luck!

propertyman

murphyabu wrote: »

They have said however that ground rent will now be £150 and double every 25 years. Does that seem a bit steep to anyone else? Is there a way in which ground rent is calculated?

Thanks

Even in the darkest parts of the property market £150 GR reviewed every 25 years wil not raise any eyebrows.

If you use one of the free calculators look at the price of a statutory extension to compare.

Shiva67

Hi all,
I'm looking to buy a 3-bedroom flat in London and saw one with a 12 year lease left. It's selling 325k£, but worth around 775k£. Could it be cheaper to buy the property, renew the lease and pay the marriage value than to buy a property with a 100 year lease at 775k£? Or is it possible that the lease cannot be extended? I don't know the ground rent of the property and I'm not familiar at all with this leasehold system (we don't have it in France). I'm trying to document on this, but it looks quite complicated. Any advice is welcome!

propertyman

Shiva67 wrote: »

Hi all,
I'm looking to buy a 3-bedroom flat in London and saw one with a 12 year lease left. It's selling 325k£, but worth around 775k£. Could it be cheaper to buy the property, renew the lease and pay the marriage value than to buy a property with a 100 year lease at 775k£? Or is it possible that the lease cannot be extended? I don't know the ground rent of the property and I'm not familiar at all with this leasehold system (we don't have it in France). I'm trying to document on this, but it looks quite complicated. Any advice is welcome!

The answer is yes possibly.

As to short lease & extend( requiring you to wait two years, or have the qualifying vendor apply and assign the right to you or negotiate) vs a 100 year lease, thats a matter of valuation of both and the running costs ( GR and SC) of either building.

Sometimes leases cannot be extended immediately as above, or may be exempt.

Hh81

Hi all, I bought my flat at the height of the market not knowing anything about leases, the property is now worth approximately 10k less than when I bought it! There are now 65 years left on the lease! I don't know what to do as I won't be able to extend my mortgage to pay a high extension fee but don't want to end up paying even more if I want to sell in 10 years time! Will the lease extension be cheap as the property is in negative equity?? Any advice greatly received! And I also don't have any savings

Hh81

Oh and the ground rent is 25 pounds per year

tim123456789

Hh81 wrote: »

Hi all, I bought my flat at the height of the market not knowing anything about leases, the property is now worth approximately 10k less than when I bought it! There are now 65 years left on the lease! I don't know what to do as I won't be able to extend my mortgage to pay a high extension fee but don't want to end up paying even more if I want to sell in 10 years time! Will the lease extension be cheap as the property is in negative equity?? Any advice greatly received! And I also don't have any savings

unfortunately not

your equity in the property is irrelevent to the calculation of the costs of lease extension

buglawton

An under 80 year lease would attract 'Marriage Value' based presumably on profit due to market value rise. What about this case then, where the property lost value rather than gained it, does the lease owner also share the 'loss'?