Extend Your Lease guide discussion

VodkaSorbet

Hi, sorry if this has already been covered but I haven't seen it.

I've contacted a solicitor to start the lease extension process but they said I need to have the property valued first so they have a figure to put in the notice.

How formal does this valuation need to be? Do I have to pay for a proper survey, or can I just get an estate agent round (pretending I'm looking to sell) and get them to give me a figure? It seems fairly obvious what the value is as next door has recently sold (also leasehold, converted from the other half of the original house mine is in).

There are 100 years on the lease still but I want to keep the property for a long time so want to do the extension now before it gets more expensive.

Many thanks!

turtleneck

Hi Vodka,
I am pretty sure you have to have a formal valuation done which costs in the region of £4-500. Estate agents tend to estimate higher as they want your business, and you want the most you can sell for. It's the same when applying for a mortgage, you might think your property is worth £200k and hope to borrow £160k (80%loan to value) but the valuer from the mortgage company might only value it at £180k (90% loan to value) which means you might not be able to get the same mortgage rate, or the mortgage at all.

SKPatel

Hello VodkaSorbet,

It is advisable to obtain a valuation from a specialist lease extension surveyor rather than a general estate agent. Your Notice could be deemed invalid if the figure you propose is unreasonable so its always best to get advice about this at the outset to avoid wasted costs. You may also need your surveyor to negotiate on your behalf later on so its key that s/he has experience in this field.

Some surveyors offer a desk top valuation service which is less expensive and may suit you at this initial stage.

Good Luck!

VodkaSorbet

Thanks for your replies.

In this situation it would be in my interest to have a valuation on the low side, but I suppose if it went too low that would be deemed 'unreasonable' as well.

Any idea where I could find a surveyor with lease extension experience? I have tried lease-advice but they had no-one in my area, I haven't found any by googling and neither my freeholder (the local council who have only ever done 1 lease extension) or the solicitor I've contacted (who are lease extension specialists) can suggest any.

SKPatel

I would suggest you look on the ALEP website for practitioners. ALEP is the Association of Leasehold Enfranchisement Practitioners so usually surveyors listed on this website have experience in lease extensions.

Good Luck!

VodkaSorbet

Thanks - very helpful :-)

VodkaSorbet

So now I've found a surveyor, but when I spoke to them they tried to talk me out of doing it.

Basically they said that as I have 100 years on the lease and a ground rent of only £10pa (fixed for the term of the lease), it won't make any difference to the value of the property.

However, I want to keep the property for around another 25-30 years if current plans pan out, so I will need to do the extension before I sell it. My thinking was to do it now before it gets more expensive, but the surveyor seemed to think it wouldn't get significantly more expensive if I don't do it for another 15 years, and in that time my situation may change and I may sell without needing to have paid out for the extension.

Now I'm in a dilemma whether to do it or not! His estimate of total cost was around £5k, of which about £4k would be the legal/survey fees on both sides. I can only imagine that the fees element of that will go up far more in the next 15 years than my income will, even if the actual premium for the lease doesn't change much.

Any thoughts?! Thanks in advance

SKPatel

I would be inclined to follow your surveyor's advice. It is rare for leases with 100 years remaining to be extended particularly if there is no value added to the property.

You may find that investing your money elsewhere may give a better return for the moment

Lilly11a

Anyone had experience of extending their lease via a personal loan ?


Costs for me expected to be circa 10k premium plus 4k costs.


To put on mortgage 5.69% plus £595 product fee plus valuation for bank plus legal fees?


Can get personal loan 15k over 5 years at 5.9%(have quote) no extra fees , can afford loan payments mean less interest overall plus extension "paid off " in 5 years rather than over the 22 left on mortgage .


Just to add any money from the 15k would pay off the personal loan and not keep for fun money

propertyman

I'd tend to say to do it. Though it does not add value per se to the flat, its the loss of value after 20 to 30 years, and the inconvenience of doing it at that time that can be eliminated early on and for along time to come.
Given the low value I might even suggest you talk to the freeholder and agree terms between you as if they get a cheque for £1000 and you pay their fees, the overall costs might be nearer £k than £5K.

I have even negotiated reverse premiums where the old pounds shilling and pence rents are replaced with modern ground rents which the leaseholder pays one or two years before moving and selling a lease with an extension up to 125 years. These rents are valuable to the landlord and in those cases as said they paid the lessee to extend!