Extend Your Lease guide discussion

Littlechef87

Looking for some advice!

I recently put in an offer on a flat having been told the lease was at 84 years. Soon after, the agent told me the seller had mad a "mistake" and the lease was actually at 77 years. I requested a reduction of 2k, which they refused, so I withdrew. The thing is, I'm still thinking about the flat - I don't think I'm likely to find another property that suits me so well. So I'm wondering if I should go for it regardless. My main question is if I get the lease extended, well the increase in value definitely (as much as you can say "definitely" in the housing market) cover my costs? The flat is on at £105k and I'm estimating that the total cost to extend if I were to do so in 2 years time will be around £8k. Will extending see the value rise to above £113k? Also, were I to hold out longer - say, for 5 years, so the lease dropped to 72 - would it make much difference?

Tom99

Littlechef87 wrote: »

Looking for some advice!

I recently put in an offer on a flat having been told the lease was at 84 years. Soon after, the agent told me the seller had mad a "mistake" and the lease was actually at 77 years. I requested a reduction of 2k, which they refused, so I withdrew. The thing is, I'm still thinking about the flat - I don't think I'm likely to find another property that suits me so well. So I'm wondering if I should go for it regardless. My main question is if I get the lease extended, well the increase in value definitely (as much as you can say "definitely" in the housing market) cover my costs? The flat is on at £105k and I'm estimating that the total cost to extend if I were to do so in 2 years time will be around £8k. Will extending see the value rise to above £113k? Also, were I to hold out longer - say, for 5 years, so the lease dropped to 72 - would it make much difference?

[FONT=Verdana, sans-serif]Whether you break even etc will depend on whether you overpay for the flat now.

[/FONT] [FONT=Verdana, sans-serif]There will be quite a hike in the premium you will have to pay with the 77 year lease v the 84 year lease because below 80 years you also pay the freeholder 50% of the marriage value.

[/FONT] [FONT=Verdana, sans-serif]I would expect the extra to be a lot more than the £2k you tried to knock off.

[/FONT] [FONT=Verdana, sans-serif]You can get an idea of the premium here:

[/FONT] [FONT=Verdana, sans-serif]https://www.lease-advice.org/calculator/[/FONT]

[FONT=Verdana, sans-serif]If the seller has owned the flat more than 2 years you can get the seller to start the lease extension process now and you take it over. That way you don't have to wait 2 years.

[/FONT] [FONT=Verdana, sans-serif]If you wait 5 years the cost is likely to rise not only in line with any general increase but because the term is less, marriage value more etc.[/FONT]

jeffj46

Hello. Sorry if this is not the right place,I'm new here,as of today. I'm extending the lease on a flat I own as requested by the buyer of the property. This has been dragging on for almost a year now and the Freeholder,in my opinion,is being deliberately obstructive. They did agree to the premium but have since changed the Solicitors acting for them and don't bother to reply to the new ones. Meanwhile my Solicitor wants to charge me hundreds of pounds extra because of the work involved continually chasing with no result. The buyer has had their mortgage offer extended twice already,I doubt it will happen a third time. Even if it does get extended,unless things now progress quickly,I will not be able to complete on my new home as I will have insufficient funds and am too old to get a mortgage. Any advice will be appreciated,for example,can I raise an official complaint and who with? Thanks.

eddddy

jeffj46 wrote: »

Any advice will be appreciated,for example,can I raise an official complaint and who with? Thanks.

No - unfortunately not.

It could be incompetence, or it could be a deliberate delaying strategy by the freeholder.

The way to get around it would be to do a statutory lease extension instead. But that may still take between 6 and 18 months. Legal fees may be higher, but the premium may be less. (Your solicitor should have explained all this to you.)

economic

jeffj46 wrote: »

Hello. Sorry if this is not the right place,I'm new here,as of today. I'm extending the lease on a flat I own as requested by the buyer of the property. This has been dragging on for almost a year now and the Freeholder,in my opinion,is being deliberately obstructive. They did agree to the premium but have since changed the Solicitors acting for them and don't bother to reply to the new ones. Meanwhile my Solicitor wants to charge me hundreds of pounds extra because of the work involved continually chasing with no result. The buyer has had their mortgage offer extended twice already,I doubt it will happen a third time. Even if it does get extended,unless things now progress quickly,I will not be able to complete on my new home as I will have insufficient funds and am too old to get a mortgage. Any advice will be appreciated,for example,can I raise an official complaint and who with? Thanks.

Can you not just sell it unextended to the buyer and serve section 42 notice of lease extension to the freeholder of the buyers behalf and let the buyer extend after you sold? You can reduce the purchase price by the amount it would cost for lease extension.

eddddy

economic wrote: »

Can you not just sell it unextended to the buyer and serve section 42 notice of lease extension to the freeholder of the buyers behalf and let the buyer extend after you sold? You can reduce the purchase price by the amount it would cost for lease extension.

... unless the buyer needs the lease extension to get a mortgage.

Or the buyer doesn't have enough ready cash to pay the extension costs, so they need it rolled into the purchase price so that they can get a bigger mortgage.

economic

eddddy wrote: »

... unless the buyer needs the lease extension to get a mortgage.

Or the buyer doesn't have enough ready cash to pay the extension costs, so they need it rolled into the purchase price so that they can get a bigger mortgage.

Agree, but the OP wasnt clear.

cpfcstar

Can anyone help?

My partner remortgaged to gain funds to renew a lease, and he added me to the mortgage to up the money we could borrow. Remortgage went two months ago. We did this all on advice from a financial advisor.

However, now we have gone to do the lease renewal and been told that I must be named on the property for two years before a renewal can happen. Before this my partner previously owned it for two years and we believed this would be ok to proceed with.
Firstly we were never told that adding me would change things.
Is there anything that can be done? We cannot live in the property for two more years. The financial advisor never said this would be an issue.

eddddy

cpfcstar wrote: »

Can anyone help?

My partner remortgaged to gain funds to renew a lease, and he added me to the mortgage to up the money we could borrow. Remortgage went two months ago. We did this all on advice from a financial advisor.

However, now we have gone to do the lease renewal and been told that I must be named on the property for two years before a renewal can happen. Before this my partner previously owned it for two years and we believed this would be ok to proceed with.
Firstly we were never told that adding me would change things.
Is there anything that can be done? We cannot live in the property for two more years. The financial advisor never said this would be an issue.

It sounds like the issue is that ownership of the property changed from just your partner, to both of you.

So you need to be joint owners for 2 years before you can do a statutory lease extension.

I'm not surprised that a financial advisor doesn't understand lease extension legislation. But presumably a solicitor was involved in the process, who knew that your reason for transfer of ownership was to get a lease extension.

Perhaps ask the solicitor why they didn't advise you that this was impossible.

(FWIW, you might still be able to negotiate an informal lease extension with the freeholder.)

cpfcstar

eddddy wrote: »

It sounds like the issue is that ownership of the property changed from just your partner, to both of you.

So you need to be joint owners for 2 years before you can do a statutory lease extension.

I'm not surprised that a financial advisor doesn't understand lease extension legislation. But presumably a solicitor was involved in the process, who knew that your reason for transfer of ownership was to get a lease extension.

Perhaps ask the solicitor why they didn't advise you that this was impossible.

(FWIW, you might still be able to negotiate an informal lease extension with the freeholder.)

Truly wish I'd known this before as we were waiting until this year for him to formally own for two years. Now all of that's been undone as the freeholder is unlikely to accept an informal lease extension.
There's no way to go back to his sole ownership is there?