Lease extension

Uk_Lover

I've had an offer on a flat accepted and it needs a lease extension ( I knew about this). When I enquired about the cost the EA said between 11 and 13k. I've been on the directgov calculator site and it says enter the current value - now I may be being stupid but what is the current value ? Is it the price I'm paying or is it the proper value of the flat. The flat is worth, when done up with the extension about 125k and I'm paying 80k. So do I put in 125 or 80. Makes quite a bit of difference (£9000 - £10000 plus costs to £14000 - £15000 plus costs). It was on the market for 90k which would be £10000 - £11000 plus costs.Is there a special formula that they have to abide to or do they just make up it up ? My friend said what they were quoting seemed high, especially for only 99 years, he said to push for 125 for that price. Can you contest and does it cause any major problems ? thanks in advance

cattie

How much is the flat valued at currently? That will be the value the price is worked out on.

Is this the site you are getting info from or is it another one? http://www.lease-advice.org/ They are very good in giving advice on all aspects of leasehold extensions. I wouldn't expect an EA to have the remotest idea of the cost of extending a lease, unless the vendor has found out the cost in advance & notified the EA.

Uk_Lover

That's the problem ! My offer is 80k, which is what I think it's worth as it is at the moment, needs a fair bit of work, plus the L extention. The real value after the work and extention will be about 120 to 125. So what figure would the calcualtion be worked out on ?The EA has been great (first time ever) and he talked to the owner and they gave the expected price of 11 to 13k. I was looking on the directgov one but comes out the same as the link you put on.I'm guessing the estimated figure was worked out on the advertised (90k) price.

Richard_Webster

There are two separate elements here.

The fact that the flat is in bad condition is not he landlord's fault and he is entitled to assume that the covenants about repair and decoration have been kept so you have to disregard that element of the reduction in value but work out what you would have paid with a lease of that length but the flat was otherwise in reasonably good condtion.

Uk_Lover

the most I would have paid with a 99 year lease would have been the asking price of 90k. What I don't know is who makes the decision of what it's worth cos if they ask me I'm going to say less and the sell will say more !

richardw

Which lease extension route? Informal or Statutory?

Is the current lease more or less than 80 years? If less than 80 years what are the forecast marriage values?

Uk_Lover

sorry you've lost me ! never bought a place with this needed before.Original lease was 99 years from 01/01/1974 so under 80 years.The calculator said the price of the lease extension is likely to be between £9000 and £10000 plus costs (basing on 80k)Because your lease has less than 80 years left, marriage value has been included in the price. Not sure what that means tbh !!

richardw

Perhaps read up a bit http://www.moneysavingexpert.com/mortgages/extend-your-lease

Nick_Plotnek

It is difficult to be accurate without knowing the location of the flat or the ground rent details (or the other lease details for that matter), but as a GUIDE only I would say that the £11,000 to £13,000 is more in the ballpark than £9-10,000 or £14-15,000.

If you need any further advice do ask.

Richard_Webster

If there is only around 60 yaers left on the lease I hope OP doesn't need a mortgage to buy it as a lot of lenders won't lend on a lease of that length so he would need to get the seller to organise the extension to complete at the same time as the purchase.

Uk_Lover

Nick_Plotnek wrote: »

It is difficult to be accurate without knowing the location of the flat or the ground rent details (or the other lease details for that matter), but as a GUIDE only I would say that the £11,000 to £13,000 is more in the ballpark than £9-10,000 or £14-15,000.

If you need any further advice do ask.

Thanks
Location is south coast and Gr is £30 per year. Talked to solicitor today and he's explained a bit more, still a bit confusing but he thought 13k was a lot too but is going to look into it. I'm a cash buyer so no probs with mortgage. Just need to sort before as I think he said if I don't then I can't extend for 2 years which is not what I want. Want to move it on in 3 to 6 months.
cheers