Extending Leases on a Leasehold property

Scooby_Man

Say I see a property that I really like and buy it - it's a leasehold with a 99 year lease.

My aspirations are to give my assets to my grand children when I expire.

How easy is it to extend a lease, so that my grand children can benefit from the fruits of my hard work? Currently, it would seem that the lease would have expired before my grand children hit their teens!

This is one thing putting me off buying a leasehold, but i am finding it extremely difficult to purchase a freehold property in the desired location (central london).

Any advice?

cattie

All flats are leasehold & providing you have a decent length lease & 99yrs is very decent & healthy, it's a relatively easy thing to do. When a lease gets to below 80yrs extending the lease becomes more costly.

Once you've owned a leasehold property for 2yrs you have the legal right to extend the lease. You can apply for a lease extension or to buy the freehold before the 2yr period is up, but the freeholder doesn't have to agree before the 2yr period.

When trying to reach an agreement over the price of a lease extension or purchase of freehold, you can if necessary apply to have a tribunal set a price if the freeholders price seems totally unreasonable.

These are the people you need for advice & info on owning leasehold properties & all relevant issues. It's a governement funded agency offering help & advice & a valuable resource for leaseholders. http://www.lease-advice.org/newintro.htm

By the way, even a flat that has share of freehold, whether held singular or in conjunction with other properties in the building still has to have a lease.

balbs

But to clarify Cattie as you say in your post 'All flats are leasehold'

well, not true in every case ....its perfectly possible to own or buy a flat that is freehold without a lease in place at all, and actually common in some areas of the UK. You have to be careful when buying though

a. some mortgage companies are notoriously iffy about lending on freehold flats(and often you will get the local reps saying that don't want to know when their head office rules are different) and

b. You will need a good solicitor to work out what what arrangements are in place between flat holders as often they are confused themselves as to the legal position - sometimes they think they will have a lease type situation without one present which can lead to some difficult situations if one of the flat owners decides to up sticks.

On the other hand it can be a good thing as it can mean that all the residents (ie the freeholders) can grant themselves leases if they want to and run the maintenance etc themselves without some profit making company taking a cut.

Ian_W

I'm sorry balbs but can you explain how that works?
My understanding of freehold is that you own "the ground below and the sky above" as well as your actual building sited in between them. Obviously in a block situation that would be impossible as there may be a flat below or above, hence most flats being leasehold.
I do understand that flat owners can together own the freehold of the entire building but I'm not clear how each flat can own it's own separate freehold title. The reason I said "most flats" is there may be situations where a flat could have no other flat above or below it, particularly in a conversion, but quite a rare exception I would have thought.

Richard_Webster

Is it important for the property to be in Central London or do you simply want an investment?

If the latter then you should be able to find a very nice detached/semi-detached house somewhere desirable in the provinces for the money you would pay for a flat in Central London. Such a house in the right location could easily be let to obtain a rental income and you won't have hassles with the cost of lease extensions and rip off freeholder/landlords.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

Doozergirl

Ian_W wrote: »

I'm sorry balbs but can you explain how that works?
My understanding of freehold is that you own "the ground below and the sky above" as well as your actual building sited in between them. Obviously in a block situation that would be impossible as there may be a flat below or above, hence most flats being leasehold.
I do understand that flat owners can together own the freehold of the entire building but I'm not clear how each flat can own it's own separate freehold title. The reason I said "most flats" is there may be situations where a flat could have no other flat above or below it, particularly in a conversion, but quite a rare exception I would have thought.

Hi Ian :wave:

They have defective titles basically. You have flats above and below but there is no legal right of support and proctection from the other flats that a lease affords, so they are unmortgageable because of the obvious risk.

I have read here that in some isolated areas of the UK it is more common and as such, some mortgage companies will lend.

To the OP, cattie's advice is spot on. You'll have no issues in extending the lease. If it si you long term plan, then the sooner you extend it, the better as the longer the lease, the less value it has.