Extend Your Lease guide discussion

Dallybally

ALEXANDRA_9876 said:

Hi Everyone,
We bought flat almost two years ago in London, zone 6. The years left for the lease will be 59 after the 01Sep. The online calculator shows me the value of £39000 to £42000 as extension, plus legal costs. That's a lot!
My questions are pretty simple:
1. What and how can you negotiate to lower down the cost of lease extension?
2. Can one of the arguments to cut the cost be that (even we pay all the service charges, ground rent,we don't cause any troubles) there are a lot of issues management company does not solve about the building? Also we have a lot of safety related issues with drug users coming to our building, there was also STABBING, management company said they can not do anything to secure our building (we just asked to put gate on entrance).BUT THEY JUST DON'T WANT TO. Can we use the argument that building is not secure and nobody does anything?

Thanks for your help in advance.

Hi. The lease is negotiated with the freeholder, not the management company, I don't think there is anything you can do to bring the price down. If you are not happy with how the management company runs the service though you could look to buy freehold, or take them to the valuation tribunal service if they are charging too much for a bad service.

philmacca

Hi there, Hoping someone can help.
We own the freehold of a converted terraced house just on outskirts of London. We bought the freehold to the property when we owned one of the two flats back in the house in 2001-2008 and just kept it on when we sold the flat in 2009. When we sold the flat we arranged for a lease extension back up to 99 years to make the property attractive to buyers. 
The leaseholder of the said flat has now contacted us to ask for a lease extension and asking how much it will cost him. To be honest I have no idea??. I've looked on the calculators available and they don't really take into effect that the Lease was written for 33 years at 200 pound ground rent per annum, 33 at 400 and final 33 years at 800. 
Does anyone know of a website that will give me an indication of possible cost? All the sites seem to go on the assumption of same GR yeach year though the life of the lease. 
Ive advised the leaseholder to contact a valuer and get a figure, then come to me with this, this seems the fairest way for both Parties. If we feel that valuation fair, then we can go ahead and gets paperwork arranged, if we feel its too low we could get a valuation ourselves from another co to check. 

sukavi2011

Hi, I am looking for some advice. I want to extend my lease ,of 86yrs and i dont know where to start, the freeholder is my local authority. Is there a way I can get an idea or estimate of costs before I go ahead so I can make sure I have funds to cover? I dont have too big a mortgage and (appr 7yr) but Im also only mid 50;s so age isn't on my side work-wise. i dont have savings and extending mortgage may/may not be an option depending on cost. TIA

Kevxter

sukavi2011 said:

Hi, I am looking for some advice. I want to extend my lease ,of 86yrs and i dont know where to start, the freeholder is my local authority. Is there a way I can get an idea or estimate of costs before I go ahead so I can make sure I have funds to cover? I dont have too big a mortgage and (appr 7yr) but Im also only mid 50;s so age isn't on my side work-wise. i dont have savings and extending mortgage may/may not be an option depending on cost. TIA

Hi, I am in a similar position to you. It all just seems needlessly complicated. You need to go to the Leasehold Advisory Service website, where there is a calculator that will estimate the premium you might have to pay. Bear in mind that on top of that you will need to pay solicitors and surveyors fees, and on top of that, the landlord's legal fees - all of which could come to several grand.

[Deleted User]

sukavi2011 said:

Hi, I am looking for some advice. I want to extend my lease ,of 86yrs and i dont know where to start, the freeholder is my local authority. Is there a way I can get an idea or estimate of costs before I go ahead so I can make sure I have funds to cover? I dont have too big a mortgage and (appr 7yr) but Im also only mid 50;s so age isn't on my side work-wise. i dont have savings and extending mortgage may/may not be an option depending on cost. TIA

Don't let it go less than 80 years as the costs increase astronomically!! Look for the nationalleaseholdcampaign on Facebook where there are thousands of people who can help. Government reforms might be on their way but don't hold your breath!

sukavi2011

Keveen/Kevxter. Thank you both for your advice, I will look into both.  Will definitely not get it that low as I have heard about the increases.  May wait a couple of months until is pandemics over and get the ball rolling. Am able to remortgage next year so will look into maybe add to it.  fingers crossed the Government will come up with something which may help.  Thanks again to both of you.

jdce

HI, I’ve been looking at a flat for sale in London with less than 7 years of lease left. A section 42 will be served by the owner and the benefit will be transferred to me on completion. Is this a madly risky way to go to own a small flat or is it a matter of following the procedure and paying a reasonable marriage Payment? The flat will cosy around 110k with a long lease would be worth £375k what would a reasonable figure be for a 99 year extension on the lease? Thank you

Slithery

jdce said:

HI, I’ve been looking at a flat for sale in London with less than 7 years of lease left. A section 42 will be served by the owner and the benefit will be transferred to me on completion. Is this a madly risky way to go to own a small flat or is it a matter of following the procedure and paying a reasonable marriage Payment? The flat will cosy around 110k with a long lease would be worth £375k what would a reasonable figure be for a 99 year extension on the lease? Thank you

£375k - £110k = £265k

eddddy

jdce said:

HI, I’ve been looking at a flat for sale in London with less than 7 years of lease left. A section 42 will be served by the owner and the benefit will be transferred to me on completion. Is this a madly risky way to go to own a small flat or is it a matter of following the procedure and paying a reasonable marriage Payment? The flat will cosy around 110k with a long lease would be worth £375k what would a reasonable figure be for a 99 year extension on the lease? Thank you

A statutory lease extension adds 90 years to the lease.

The price is made up of a number of components. One of them is 50% of marriage value.

The marriage value on your flat should be £375k - £110k = £265k.    50% of £265k = £132.5k.  So a rough guess for the price might be £150k. (But it's a really complex issue.)

However, your valuer should give you a probable price plus a 'best case' price, and a 'worst case' price.

They'll be deadlines, so you'll need to have £150k (or whatever) available by the deadline - or you'll lose your right to extend the lease and have to wait 2 years. With that kind of money at stake, expect a hard fight from the freeholder.

And again, with so much money at stake, you should get a really good valuer and a really good specialist solicitor to advise you. Don't use a conveyancing solicitor for this.

SooGee13

I see there's no mention of extending your lease when you already own a share of the freehold.It is easier & cheaper than the procedure when you're just a leaseholder,but I'm surprised it's not mentioned. You only need to pay the solicitors' fees, which for a solicitor familiar with the procedure,& there are several on line,is approximately £500+. You and/or your solicitor will ask the other freehold share owners if they agree(usually just a formality) and then your solicitor will draw up the necessary documentation. I believe this is a fairly recent ability,but as I say,I'm surprised it's not mentioned in the article.