Extend Your Lease guide discussion

strawberries1

Government's Leasehold consultation paper. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/632108/Tackling_unfair_practices_in_the_leasehold_market.pdf

buglawton

Thanks Strawbs. The consultation seems to focus solely on ground rent levels. Another aspect where lease owners lever out cash by trying to impose a hefty tenant underletting fee annually (search for Pier or Freehold Managers).

Perhaps there's still time to lobby our MPs or Lords members to get the law to firmly reflect what a number of court rulings said on the subject of underletting/subletting clauses in leases.

starving_artist

amal wrote: »

How can we abolish leasehold? It is painfullly unfair on home owners, who purchased flats at a market value which assumed full ownership of an asset that could be passed on to generations to come. Sadly the cost of renewing the lease increases with every year, making it impossible to extend. This is a trap towards reversion of the lease.

What can we do to get the politicians to act?

Leasehold Knowledge Partnership is the main lobbying group for reform of leasehold. Peter Bottomley MP has also long campaigned for reform.

curious_badger

Solicitor is asking whether to proceed down the voluntary route or the formal route of "serving notice". We have decided to approach informally first and see what we get, then serve notice if we don't get a good enough offer.

davehove

Hello,

I own a flat which is a leasehold, 85 years remaining on the lease. Currently selling the flat and buyer has asked for lease extension to be included in the sale.

Have enquired informally about extending, received quote which was at a new 99 year lease, not an extension by 80 years on the existing lease. Ground rent is due to increase to 150 / year until 2042, then gradually up to 1800 / year until expiry of the lease.

Not clear if the standard response from the freeholder should be to increase the lease by 80 years, e.g. to 165 years, not to provide effectively another 14 years.

Is this correct as a standard response or should I be questioning the length of the extension?

eddddy

davehove wrote: »

Hello,

I own a flat which is a leasehold, 85 years remaining on the lease. Currently selling the flat and buyer has asked for lease extension to be included in the sale.

Have enquired informally about extending, received quote which was at a new 99 year lease, not an extension by 80 years on the existing lease. Ground rent is due to increase to 150 / year until 2042, then gradually up to 1800 / year until expiry of the lease.

Not clear if the standard response from the freeholder should be to increase the lease by 80 years, e.g. to 165 years, not to provide effectively another 14 years.

Is this correct as a standard response or should I be questioning the length of the extension?

What you're describing is an 'informal lease extension'. The terms can be whatever both parties (leaseholder and freeholder) agree on.

For example, you could agree to extend the lease for 1 week at a cost of £100k, if you want!

It sounds like, your freeholder has made a suggestion (offer). You can suggest (offer) something else if you want.

The alternative is a 'statutory lease extension' - that always adds 90 years to the lease, and reduces the ground rent to zero. (And it's usually better value - but it typically takes a long time to arrange.)

Here's some useful info: https://www.lease-advice.org/faq/how-can-i-extend-my-lease/

[Deleted User]

A flat lease should be at least 120 years I think. You can get all you need to know from this campaign group:
https://www.facebook.com/groups/786983251448976/

Big problems going on with leaseholds right now and the government just concluded a call for responses on the issue.

[Deleted User]

Plus the statutory route can be very very expensive. I think this website has a calculator somewhere.

eddddy

[Deleted User] wrote:

Plus the statutory route can be very very expensive. I think this website has a calculator somewhere.

No - the premium will almost always be 'better value' with a statutory lease extension.

(If the law says a freeholder must sell a lease extension for £x, it's unlikely that the freeholder would volunteer to sell it for less than £x.)

But a statutory lease extension usually takes longer and the legal costs are likely to be higher.

There are a few lease extension calculators on the web, including this one: https://www.lease-advice.org/calculator/

[Deleted User]

Depends on what the statutory costs are - can be many shocking thousands plus he will also have to pay their legal costs which can become huge if there is any other dispute. I know people who have made very reasonable informal arrangements but that was some years ago! It is a trade off of course against the eventual selling price of the leasehold interest (remember you don't own anything except that). If the flat sale will cover all the fees fine.

In fact you are extending the lease just at the right time because if it dips below 80 years the costs increase by startling amounts and you have a declining asset.