Extending a lease.

LaneJL74

Just wondering if some one can help me.

I own a flat which has 55year left on the lease, I need to extend this as Im finding it difficult to remortgage. The ground rent is £20.00 a year and the current value is £65.000 (without the extended lease) and £90.000 (with the extended lease). This quote is from the management company, who is also a estate agent.

I have been quoted £10,000 for the extending of the lease, solictor fees for both myself and the freeholder.

Is this a fair price? I am based in Cardiff, if anyone can advise me.

Thanks

Peater

There just so happens to be a thread about it on the 1st page too:

https://forums.moneysavingexpert.com/discussion/3825027

Richard_Webster

You will find a link to a useful lease extension calculator at http://www.lease-advice.org/newintro.htm.

That will give you a ball park for a 90 year extension (145 years) at a nil ground rent. The freeholder may have offered you a different length of lease and an increased ground rent so the figures may not be quite the same.

richardw

Perhaps get other valuations from three other agents, that aren't mates of the management company.

spendaddict

I am looking to sell my property soon I have 63 years left on my lease, I am aware that this will have a reduced value to my property. I have thought about extending the lease on completion of the sale as a option which would reflect (as much as I can) in the asking price and save the buyer having to wait 2 years before they could purchase the lease. Is this a viable option?

Also looking into the 100 mortgage lenders 66 of them would lend on the property as it is above their minimum unexpired lease terms (most of them being 50-55 years including the mortage term), 7 out of the 10 of these being the UK's biggest banks. I appreciate that the buyers do need to be aware that the lease would need to be extended at some point and the costs involved but the EAs were making it sound like buyers would not be able to get a mortgage at all and I would have to rely on cash buyers which is clearly not the case.

I will never buy a leasehold property again its a nightmare.

Richard_Webster

but the EAs were making it sound like buyers would not be able to get a mortgage at all and I would have to rely on cash buyers which is clearly not the case.

No but if I was acting for the buyer I would tell them not to buy it, regardless of whether they could get a mortgage or not!

spendaddict

Hi Richard

I disagree as long as the lease term is reflected in the price and the buyers are fully aware that they would have to extend the lease, why would you tell them to buy somewhere else!

richardw

spendaddict wrote: »

I disagree as long as the lease term is reflected in the price and the buyers are fully aware that they would have to extend the lease, why would you tell them to buy somewhere else!

Because the marriage value would be changing as the lease shortens.

Nick_Plotnek

For what it's worth, as long as the margin is adequate, I would never advise a client not to buy a short lease property, be it a house or flat, as long as they are aware of the issues involved.

Obviously if the vendor can't/won't serve Notice claiming the freehold/lease extension then the purchaser will have to wait the two-year period to qualify, and this must be factored into the equation.

Hope this helps.

spendaddict

Thanks Nick that makes alot of sense, personally I am eligible to extend the lease after living there for 11 years and very willing to serve the notice of claim if thats what the buyer wants me to do as part of the sale.

As with all leaseholds the lease is always decreasing isnt that the point?