Selling a house with 77 years left on lease

RuthH8

My husband and his sister jointly own a house previously belonging to their parents. We accepted an offer on it 3 weeks ago and as the house had been on the market for 11 months and the couple buying were first time buyers we accepted a lower offer (dropped the price £9k).
We were thinking that things were progressing nicely, but then heard from the couples solicitor asking us to extend the current lease or buy the freehold. There is currently 77 years left on the lease. We have not been informed that the couple are unable to secure a mortgage because of this, but just want us to pay for it so they don't have to at a later date.
We are just wondering where we stand, we are obviously keen to get the house moved and believed the couple are more than keen to be in as soon as possible.
We really don't want to have to accept these costs especially after significantly reducing the house in the first place, but also don't know what the costs would be, are we talking many thousands?
Any thoughts or advice would be greatly appreciated.
Many thanks

leeelw

is it a shared ownership ?

normally with a house the freehold is part of the purchase

in my experience of selling flats and maisonettes with leasehold, 77 years is not a problematic time left on a lease as opposed to it may cause the buyer some problems when they come to sell.

Its entirely the buyers choice at this stage unless the lender has a issue, saying that there is a formula the lender can use, comparing how long the mortgage product is and how long will be left when the mortgage is paid. you may be able to google to work out this formula ??

I would suggest it is nearing boderline and the solicitor has advised a recommendation to the buyers other than the buyers having to sort it at a later date.

Make enquiries how much it would cost, and get advice from your solicitor.

you might be able to purchase an extended 15 years, it might be less than you think and split the cost with the buyers ?

you are entitled to hold your ground and advise the discount of the house is more than enough to take care of any issues.

DVardysShadow

RuthH8 wrote: »

.... We really don't want to have to accept these costs especially after significantly reducing the house in the first place, but also don't know what the costs would be, are we talking many thousands?
Any thoughts or advice would be greatly appreciated.
Many thanks

Quite straightforwardly, what did your buyers understand when they made the offer you accepted?

If they knew that the lease was 77 years, then the cost of extension is down to them. But it would be possible and a good move to use your right for an extension [buyers do not get the right to extend for 2 years - when it might cost more] but do it at your buyers expense. Your solicitor should be able to arrange an extension which your buyers pay for and complete on.

If they did not know the property was leasehold, then you are lucky they are still buyers.

RuthH8

They were aware that the property was lease hold, but must admit we didn't even consider that this would be an issue as the house was only built in 1996.
We will get our solicitor to look into it for us. Extending by a small amount could be the fairest option, if we do have to pay it, or hopefully split costs. We do not want to lose this sale, but also do not want to feel backed into a corner.

HappyMJ

Why would you accept a lower price because the buyers are first time buyers?

Anyway, it won't cost too much but it increases the value of the property so you should renegotiate the price that they pay for the property. At least include the full cost of extending the lease in the new purchase price.

Also, 1996 to 2012 is 16 years. Most leases start at 99 years so there should be 83 years left. Seems strange to start with 93 years.

RuthH8

TBH we accepted a lower offer more because it had been on the market for nearly a year and there hadnt been many offers forthcoming. The house needs to be sold as there is no need for it any longer and we do not want to go down the route of renting it out.
I too was slightly confused about the term of the lease, so will get them to look into it.
I'm thinking that the buyers probably haven't considered the fact that the house price should go up if the lease is extended. It will definitely be worth sowing that seed and see if their request changes.

Richard_Webster

I'm thinking that the buyers probably haven't considered the fact that the house price should go up if the lease is extended.

Er...possibly...but what are similar freehold houses going for in the area?

Unfortunately it is often the case that when pricing houses, estate agents don't take length of lease into account. So it is often the case that the figure they come up with is for a freehold or a 900+ year lease. If the lease is unusually short (for a house) then that will affect the value in a negative way.

Unscrupulous builders were conning innocent buyers of new property by selling new build houses on 99 year leases. I think the practice stinks.

Buyers may have had little choice or didn't realise that 20 years or so later they would end up paying to buy freehold or extend the lease - builder (or toxic property company who bought freeholds) then gets second bite of cherry.

irwellgirl

We've had a similar situation- my late mother's house had 99 years left on the lease so we never imagined an issue especially as the buyer is paying cash and already has a tennant lined up for the house.

Anyway he decided that he wanted to extend the lease- and insisted on a long extension to 999 years!!! Everyone tried to reasonwith him but this was his 'thing.'

Luckily its cost just over £600 including the councils legal costs but its taken since March to get to the stage where we can see completion on the horizon and we are only in this position as my husband has badgered those involved to ensure it moves forwards.

You have my sympathy- hope it sorts itself out for you

RuthH8

We are now waiting to see what information comes back with regards to buying//extending the lease and hopefully we can resolve the situation quickly and amicably.

RuthH8

Still waiting for figures to come through, but have now found out that Simarc deal with the leasehold and we have to pay them £48 for asking the question! After googling 'Simarc' we are now slightly concerned how things might progress.

mikey72

We bought our house (60's build) as leasehold. We bought the freehold at the same time, it was about £1500, which was around 1.5% of the house price. It does mean we own both, but seperately, and can either sell freehold or leasehold again. But then we can be forced to sell the freehold.