Extend Your Lease guide discussion

Tom99

ruby2sday wrote: »

Hi! I’m a first time buyer and have found a dream flat up for auction with a super low guide price of 90k, but it only has 17 years on the lease. Is the cost of extending going to be insanely high?

Not sure what you would regard as insane but if £90k is the correct price for a 17yr lease then extending will be say an extra c £120k approx.

ruby2sday

Wow ok that’s significantly more than I had hoped. How do you go about finding out how much it wil cost without having to get a solicitor, as obviously I don’t want to pay solictor fees for a property I’ve not bought? Thanks

eddddy

ruby2sday wrote: »

Wow ok that’s significantly more than I had hoped. How do you go about finding out how much it wil cost without having to get a solicitor, as obviously I don’t want to pay solictor fees for a property I’ve not bought? Thanks

Solicitors don't calculate the cost of lease extensions - you would need a lease extension valuer.

But a solicitor could give you their quote for doing the legal stuff.

There are a few online calculators that will give you a lease extension cost - like this one: https://www.falbros.com/calculators/lease-extension/

That calculator confirms Tom99's figure of £120k for extending a 17 year lease.

However, you'll need to own the flat for 2 years before you can extend the lease (unless you do a deal with the freeholder).

So you'll then have a 15 year lease. The calculator says the price then goes up to £140k.

strawberries1

You can get the seller to serve a S.42 Notice so you don't have to wait for 2years after purchase to extend.

eddddy

strawberries1 wrote: »

You can get the seller to serve a S.42 Notice so you don't have to wait for 2years after purchase to extend.

Yes - that's technically correct. But in this case, it's an auction property:

ruby2sday wrote: »

Hi! I’m a first time buyer and have found a dream flat up for auction with a super low guide price of 90k, but it only has 17 years on the lease.

So unless it's stated in the 'special conditions of sale', you wouldn't really have any hope of persuading the seller to do it.

ruby2sday

I’ve been trying to track down the freeholder to ask about extending the lease, but the company named as the freeholder don’t have a phone number or any contact details anywhere and other companies referenced in the legal pack either don’t have contact details either or claim to have nothing to do with the property! Any ideas on how to track the freeholder down?

eddddy

ruby2sday wrote: »

I’ve been trying to track down the freeholder to ask about extending the lease, but the company named as the freeholder don’t have a phone number or any contact details anywhere and other companies referenced in the legal pack either don’t have contact details either or claim to have nothing to do with the property! Any ideas on how to track the freeholder down?

Details of the freeholder will definitely be in the auction legal pack.

However, I think it's very unlikely that the freeholder will discuss anything with you.

Realistically, there may be 10 or 20 or more people interested in buying the flat. The freeholder won't have the time or resources to answer everyone's questions.

Durban

Hello

I own a BTL flat with 92 years remaining on the lease.

is there any advantage / disadvantage of extending the lease at 85 years or waiting until 81 years so I don't incur the marriage penalty.
I would like to leave it as long as I can but not if is better to do earlier.

Many thanks

strawberries1

Tom99 wrote: »

I would go with a fixed fee, hourly could soon run up quite a bill.

I went with the fixed fee.

The freeholder had proposed £18,867 (counter notice) as opposed to my £12,000 (S.42). After I presented him my surveyors calculations he's reduced it to £16,000.

I've asked how much it will be if he retained some ground rent and he's offered £15,700 for retaining £30 GR.

He says he'll reduce the premium by £1000- for every £100 in GR ie £15,000 for £100gr increasing by £100 every 25yrs.

£14000 if £200 increasing by £100 every 25yrs

£13,000 if £300 increasing by £100 every 25yrs.

72yrs remaining, bought at £260,000 in July 2018 £30 GR.

In 2013 a similar flat with 78yrs left paid £6000 to extend with GR at £250 doubling every 25yrs.

Is this fair enough or shall I get my surveyor to negotiate further?

Counter notice is dated 7th September. I have 6 months from that date to agree the premium right?

Jackson6

OnceUponATime wrote: »

Hi all, I am really new to this but as you all seem so knowledgeable, I figured that I'd ask your opinions on this matter as I am a first time buyer.

The flat is a shared ownership, housing association (HA) part owned flat (they are the freeholder). It is 1 of 4 in a converted terrace. It was on the market a few weeks back at 430,000 and has now been reduced to 400,000, to reflect the lease term. I would be purchasing 30% at 120,000.
I have had a look on the land registry and see that the basement and top floor flats have had their leases extended to 100+ years. I can also see from the site that the flat that I wish to purchase as well as the 1st floor flat have 'option to purchase a percentage of the freehold' listed as a note. Which leads me to believe that the other two flats have already done this as this is not an option listed for them on the land registry site. So having said all this, I have several questions should I put in an offer.

1. If it is the case that the other two neighbours have purchased a percentage of the freehold and I wish to extend my leasehold, will I have to go through them as well as the HA?

2. Do you think that as they have deducted 30,000, it means that they might try and charge me this amount to extend the lease because that's what they believe it will cost?

3. Do you all think that the amount deducted is a fair amount considering that I am only purchasing 30% for now?

4. As I will only own 30%, will I be expected to pay 30% of the lease extension as the HA own the other 70%?

5. Has anyone had anyone else had any dealings with extending leases when the freeholder is a HA and what was your experience?

Any advice would be much appreciated, thanks in advance!

I extended my lease as a shared ownership leaseholder of a property I only owned a part-share of. I believe that it is up to individual Housing Associations' discretion as to whether to allow it or not, in cases where less than 100% is owned.

I extended my lease because a neighbour in the same block told me he had had problems trying to sell at his desired price, because of what was perceived as a short lease. I was told that if the lease is 75 years or under, you will face problems in attaining the price you want.

I spent something like £8k all told, it was a tortuous process (problems with the solicitor, plus it felt like I was throwing money down the lav), but my understanding is that this £8k outlay has increased the value (or rather, prevented a decrease in value) of around £40k.