First Time Buyer: Am I out of my depth?

Phonetic

Hello all!

I read this forum regularly as I am on my quest to own my own property (simply because for me it would be cheaper than renting). This is a very helpful place and I hope that you guys will be able to offer me some advice.

Anyway, I found a 1 bedroom flat in London that I liked on Rightmove that was listed with a guide Price of £100,000.

I went to the estate agent to get further information. I was told that £100,000 was a guide price and that the owner was looking for a price around £115k. I enquired about the lease and he said it was over 100 years left. I was okay with that.

I went to view that flat, and honestly, I liked it. When I saw the ad on rightmove i thought a flat listed as £100k may go from £95k-£105k but I was willing to pay up to that amount EXCEPT I was informed that the lease has only 82 years left!

In my opinion I cannot buy a flat with what I consider to be a low lease due to the implications. I enquired how much it would cost to extend the lease and was told a few days later that his neighbour paid £5k!

I cannot afford to spend that much on an extention at this point as ALL my life savings (very small ) would only cover the 10% deposit (believe me I have SAVED).

I have been scrambling around the darkest recesses of the internet to find out how I can get round this. Would it be possible to offer the freeholder, say £1,500 (equivalent to 25 years ground rent @£60 per year) as a token to just extend it to the original 99 year lease? Within a few years I will be able to afford to extend for an additional 90 years.

I would really appreciate any advice you could give.

And by the way, the owner of that flat said he would not sell for less than £115k as he needs to money to get a bigger house on the coast.

He has had 2 offers in the past for £115k but they both pulled out at the last minute.

Thanks

:beer:

andy.m_2

You could buy the flat, wait the pre-requisite period of time (2 years?) and then extend the lease yourself.

Phonetic

andy.m wrote: »

You could buy the flat, wait the pre-requisite period of time (2 years?) and then extend the lease yourself.

Thanks andy.m!

I thought about that, howver after 2 years, the lease would be just under 80 years left and that is when I would have to pay 'Marriage Value' which would add substantial cost the exention.

Thanks again. I will take your advice into consideration.

bebewoo

I bet the other two buyers who pulled out did so because of the lease.

krlyr

Of course the seller wants £115k for it, but a house is only worth what a buyer will pay. Two dropped out buyers, a short lease and a seller who wants to move on to bigger and better, I'd say you're probably in a good position to get yourself some money off. Unless you're really, really in love with this place and couldn't hope to find anything as amazing at that price ever again, I say make a cheeky offer and walk away if they won't play ball.

brit1234

I would look at paying under £100k.

Don't listen to estate agents they fib. The usual rule is that if an estate agent opens their mouth and speaks it is lies. Their job is to milk as much money out of you as possible for the seller. Be prepared and do your research to avoid this.

Good luck

Phonetic

krlyr wrote: »

Of course the seller wants £115k for it, but a house is only worth what a buyer will pay. Two dropped out buyers, a short lease and a seller who wants to move on to bigger and better, I'd say you're probably in a good position to get yourself some money off. Unless you're really, really in love with this place and couldn't hope to find anything as amazing at that price ever again, I say make a cheeky offer and walk away if they won't play ball.

Thanks krlyr

What offer would you consider to be reasonable?
The flat is nice, but I am not in love. It's only bricks and mortar after all. I just need a place to live that is more than a small room in a shared flat.

Maybe one day

Fire_Fox

Welcome! Have you researched sold prices for the street and area? If you need a mortgage their valuers opinion will dictate what you can pay because they will only give you 90% of the value. Normally the price you offer is on the basis of the extended lease, then the seller pays the £5K.

You cannot offer anything to the freeholder, you have no contractual relationship with them. A buyer does not have the right to extend the lease for two years after completion, so price needs to be formally agreed by the seller and done as part of the conveyancing. They can ask for an extension of whatever they like, but it could take months to agree. The neighbours price is an indication only, if the formal process has not been started and the freeholder wants to do things by the book it could take months. Loads of information on leasehold here
http://www.lease-advice.org/publications/

Phonetic

Hi Fire Fox

Thanks a lot for your advice. It all seems very complicated but I nwill go through it and hopefully get a better understanding. I realise that this is a big commitment and not something I should rush into lightly.

I will be OK letting this go. Not the outcome I would like but I can't trap myself into what could turn out to be a sinking ship.

I realy appreciate everyone's advice. I was quite disappointed earlier, but I just have to remind myself it's just a flat.

Phonetic

brit1234 wrote: »

I would look at paying under £100k.

Don't listen to estate agents they fib. The usual rule is that if an estate agent opens their mouth and speaks it is lies. Their job is to milk as much money out of you as possible for the seller. Be prepared and do your research to avoid this.

Good luck

Haha! You sound just like my mum.

She thinks I should offer £95k lol. She was fuming as they gave a guide price of £100k when that was not really the case.

JimmyTheWig

82 years isn't a particularly short lease, is it?