Extend Your Lease guide discussion

DaveMCH

Wow that's a lot of words to not answer my question. I hope you don't charge by the hour, if you do you must be very expensive.

My question was:

"If the price to extend is £10,000 will the value of my flat increase by £10,000?"

eddddy

DaveMCH wrote: »

Wow that's a lot of words to not answer my question. I hope you don't charge by the hour, if you do you must be very expensive.

My question was:

"If the price to extend is £10,000 will the value of my flat increase by £10,000?"

Generally, you would 'make a profit' if you get a statutory lease extension, at a price that's worked out using the statutory formula.

You can look at a lease extension calculator, to see what a statutory lease extension should cost you: https://www.lease-advice.org/calculator/


But if, for example, your freeholder is offering you a lease extension for £10,000 - it may be a very bad deal. It could even reduce the value of your flat.


To get a better feel, you could ask some local estate agents what your flat would sell for with a statutory lease extension, and without a statutory lease extension.

DaveMCH

Thanks for your input, that's helped a lot

noddynoo

Hi I am currently looking at a flat for sale which will have a new 125 yr lease and GR of 150. I am not sure yet whether the GR is a doubling one but if it was would I be able to get a statutory extension after 2 year to eliminate it? And could the freeholder say no? The flat is in excellent condition and in a great location and reasonable price but its a brand new lease as has only ever been let previously and experience has shown me that these often have doubling ground rents Thank you

eddddy

noddynoo wrote: »

Hi I am currently looking at a flat for sale which will have a new 125 yr lease and GR of 150. I am not sure yet whether the GR is a doubling one but if it was would I be able to get a statutory extension after 2 year to eliminate it? And could the freeholder say no? The flat is in excellent condition and in a great location and reasonable price but its a brand new lease as has only ever been let previously and experience has shown me that these often have doubling ground rents Thank you

Yes - you can get a statutory lease extension after 2 years, to reduce the GR to zero. The freeholder cannot say 'No'.

Obviously, there will be a price to pay for that, plus valuation and legal fees.

If the freeholder is granting a new lease now, they have the freedom to set whatever ground rent they choose. You could try negotiating a better GR.

(You might even be prepared to pay a bit extra for a lower GR, as it will save you fees etc in 2 years time.)

noddynoo

Hi Edddy thanks so much I was wondering about offering moe now for a better GR but wasn't sure that as possible and the agent is not forthcoming with information until I have an offer made and a solicitor etc.

noddynoo

Hi Edddy thanks so much I was wondering about offering moe now for a better GR but wasn't sure that as possible and the agent is not forthcoming with information until I have an offer made and a solicitor etc

badenmorgan

Hi all, I wonder if you can help?
I am a shared ownership flat 'owner' where I own 35% of a flat and housing association own rest, and I pay rent on portion I don’t own. I am interested in staircasing up to 100% via a new mortgage with my bank (or better offer). The issue I have is my lease has only 69 years left on it (I now know I should have extended it back then but let’s not go there…..). I also know that I will need to extend the lease if I ever want to sell the flat, and that it will be hugely expensive to do (one online estimator said £44k!?!). As I still want to staircase, the question I have is do I: try and extend the lease now, and then staircase, or: try and staircase first as the flat will be at a lower value with only 69yrs on lease and try and extend the lease after? Or does is not matter either way? Value of flat in 2006 was 220k, Zoopla says now around 450k, but I don’t know if it’s factored in the 69yr lease. I am intending to get the flat valued, but has to be done via Housing Assoc. Initial discussion with the bank (I didn’t mention the lease as they didn’t ask) was they could lend me the 65%, but I’m not confident I could do this and pay for the darned lease extension. All advice would be welcome! Thanks.

eddddy

badenmorgan wrote: »

As I still want to staircase, the question I have is do I: try and extend the lease now, and then staircase, or: try and staircase first as the flat will be at a lower value with only 69yrs on lease and try and extend the lease after? Or does is not matter either way?

Once you staircase to 100% ownership, you can get a statutory lease extension. With a statutory lease extension, the law states:

• how the lease extension cost is calculated
• that 90 years will be added to the lease
• that the ground rent will reduce to zero

But the law does not apply if you own less than 100%.

So, if you own less than 100%, the Housing Association can make up any rules they choose about lease extensions. (And different Housing Associations choose different rules.)

So you need to ask your Housing Association what their rules are. Then you can work whether to extend the lease first or staircase first.

(Once you know their rules, maybe you'll want to come back here and ask more questions.)

badenmorgan

thanks eddddy, I'll check