Extend Your Lease guide discussion

ognum

buglawton wrote: »

Most leaseholders never think about the issue and never put money aside for a lease extension in advance. There are always other priorities. This is why so very many poor lease flats come up for sale (with the EA carefully avoiding mention of the remaining lease term in the listing). Seller asks for a handsome price and guess what, it remains on the market forever as buyer after buyer discovers the facts and runs a mile.

I agree, but this can hardly be the freeholders fault. Most of us who own an asset like to maximise it's value. The freeholders has waited many, many years for the asset to have value and will like the rest of us try to maximise it's value that is why we have the complicated method of marriage value.

I am not a freeholder but simply understand that if a leaseholder allows their lease to fall they need to pay for the privilege of increasing it's length.

I do own several flats and have ensured they all started with 999 year leases and peppercorn and not escalating ground rents.

faustocoppi

I have a rather unique, situation I wonder if someone can help.
My parents have a terraced house in London, bought in the 70s.

This has 10years left on the lease now (yes that's right 10 years).
I'm not sure what to do, they don't have a lot of savings. Houses on their street go for around £280k though their house would need a ton of work to get it to this value.

They pay a small ground rent of £5 a year they have no interaction with the freeholder except to pay this.

Recently they wrote a letter to the freeholder to ask if he would sell the freehold, they just got a simple reply of no. Which I'm not surprised at, to make matters worse the freehold seems to be now owned by people that own quite a few properties so are probably looking to maximize their return on this situation.

malinkar

Hi all,

we recently purchased a flat in London for the value of £250,000 (with no ground rent to pay). We were aware that the property had 78 years left unexpired on the lease. One of the condition of the purchase was that the seller would send notice to the landlord to renew the lease and transfer it to us.

In order to get things started, we proposed a premium of £7000, which was arrived at using various online calculators and by looking at recent decisions by the LVT.

The landlord (through a management company) came back to us with a counter-proposal of £8000 for the premium. Surprisingly, they did so without having a surveyor visit the property. Is this usual?

We were wondering whether it would be worth negotiating this premium. It seems that £8000 is reasonable for a property of this value and this number of years left on the lease. If our surveyor comes back with a value around £8000, it means we essentially wasted up to £1000 on fees.

We obviously lack experience to make this call. Could anyone with more experience advise on how to best processed?


Thanks!

TCLH

Hi all,
Just been reading through all these posts but still need some help.
I have been negotiating informally with my freeholder who agreed last year to take the lease back from 78 years to 125yrs at a cost of £6k plus costs. This in itself doesn't sound too bad but the thing that is bothering me is the ground rent; it's currently £150. per annum but they want to increase it to £300. at the start of the new lease doubling every 25 years. This will mean in the last 25 years of the lease it will be £4800. per annum. Now I know 100 years is a long way off but I'm really not sure whether to go ahead with this or pull out.
The property is a maisonette worth about £220k in greater London and there is no service charge as there are only 4 maisonettes in the block so we pay our own insurance and maintenance when needed.
If I plan to sell the flat (which I will do either this year or within the next 4) is it likely that the fact the ground rent doubles every 25 years would put off a buyer?
My other option is to go down the statutory route; the Leasehold Advisory calculator estimates the cost of this at between £9,000 and £11,000 plus costs on top.
I questioned the doubling ground rent with the freeholder but they refused to budge as the process has dragged on for almost a year and have set me a completion deadline of end of Feb. Because of this I am concerned that if I do pull out and go down the statutory route they will be awkward and try to hike up the price and their costs. They have already said that if I don't complete by the end of Feb they will retract their offer and seek costs. Can they do this (seek costs)?
It doesn't particularly matter to me when I sell the flat; if I carry on with the informal route I will probably try and sell quite quickly but I don't want to have shot myself in the foot by agreeing this route with the ground rent and then finding that I'm struggling to find a buyer because of it. I would really appreciate an advice you can give!
Thanks

Hard_food_for_midas

Campaign to Abolish Residential Leasehold. website used to be https://www.carl.org.uk - it's gone.

Properties should revert to common hold:
http://www.leaseholdlife.info/index.php/component/content/article/325-leasehold-lifes-guest-contributors/guest-contributors-articles/334-the-great-ignored-commonhold-and-leasehold

But, the interests of the land owning class and the lack of political will to change is what we are up against.

Vote the establishment out. NOW!

Half of these landlords are tax dodging rich individuals who declare their profits from a beech hut in Turks and Caicos Islands, Jersey etc.

Leasehold is a sham and must end

pete3027

I have just used the Leasehold Calculator and it came to a value of £5000-£7000. Can I assume this does not include Solicitor or valuation fees. What is the average cost of these?
Thanks

GTG

pete3027 wrote: »

I have just used the Leasehold Calculator and it came to a value of £5000-£7000. Can I assume this does not include Solicitor or valuation fees. What is the average cost of these?
Thanks

Yes you're right Pete, the cost of the valuation depends upon the value of your property. Solicitors costs usually vary depending in which part of the country they are in. You may find what you're looking for on the government sponsored leasehold advisory service website. Just using google is another idea.

pete3027

Wow that was a quick reply, thanks for that.
I have had an informal chat with a solicitor and they quoted £750-£1400, this just seemed a bit exspensive.

Blanka2015

Dear all,

I am looking for an advice... I am looking to extend the lease on my flat (currently it's 74 years). I have approached the freeholder directly and so far paid around £200 for their valuation. The freeholder then sent me a letter, offering a FREE lease extension to 99 years. They've only stated that I would be responsible for covering their solicitor fees for drawing new contracts and increased my ground rent from £75/year to £300/year.

Have any of you had similar experience? The offer is genuine - I called the freeholder just in order to confirm; however, this seems like "too good to be true" as I was expecting the cost over £10,000 given the fact the length of the lease is now below 80 years...

What's the catch? Can you please help?

Thank you very much in advance.

ognum

There is a lot to think about but is it really a good deal? Is there an escalator on the ground rent payment ie increase in cost of living it % annual interest? If not the sums work out this way -

100 years at £300 per annum =£30K for length of lease

lease extension £10k for 99 year lease and peppercorn rent

Plus they will be negotiating again when the lease drops to 75 years again!