Lease Extension Calculator...let It Do The Hard Work

Mutiny901

I recently had a new thread (posted yesterday) on the cost, formula for lease extension. Which is a living nightmare for quite a few people...including myself as I am looking at purchasing a flat with a low lease with my fiance.

On may many surfs and googles for assistance, I came across this nifty site. I even used the figures from The Leasehold Advisory web-site for their valuation and it comes up the same everytime! You know the one where the lease is 68 years unexpired and the ground rent is £50 blah, blah

No more having to sit down doing the maths!

http://www.tenancy-agreements.co.uk/lease.php

I hope this proves invalauble for you all! :j :beer:

Doozergirl

How did that get missed? That's a brilliant find!

dankes

Mutiny901 wrote: »

I recently had a new thread (posted yesterday) on the cost, formula for lease extension. Which is a living nightmare for quite a few people...including myself as I am looking at purchasing a flat with a low lease with my fiance.


No more having to sit down doing the maths!

http://www.tenancy-agreements.co.uk/lease.php

Thanks so much for this. You're a star.

Could someone explain how to work out the yield and the landlord's marriage value? Thanks so much, have no clue what either of them mean.

wecanhelpu

Of no interest to me personally, but good find.

hedgehogpenguin

i believe the landlord's marriage value is 50% when the unexpired lease in under 80 years. However can anyone shed any light on what the yield is ?

Doozergirl

From http://www.lease-advice.org.uk/levaframe.htm

"The critical factor in the calculation is the assumed yield percentage, which the valuer will estimate from a close scrutiny of local freehold auction prices, calculating back the yield from evidence of what freehold investments have achieved in the open market. In effect the valuer, being able to see from the particulars of auctioned properties the unexpired terms and the ground rents and knowing the prices actually paid, will be able to do the above calculation in reverse producing an indicator of the yield percentage being achieved."

The yield determined in the Cadogan v. Sportelli case is 4.75% for flats and 5% for houses. I think that runs across the entire board now, certainly London.

Doozergirl

hencloud, personal links and advertising are not allowed on this site.

Whilst your post is of true value, could you remove your personal details or I shall report your post and it will end up deleted, and we will lack your helpful input.

Stick around and I'm sure you'll be able to help us with some rough calculations when the question is asked (which it often is)

Valman

The yield rate is about 7-8% whilst the deferment rate for flats is 5% and for leasehold house is 4.75%. The only site that I have found that seems to be accurate is buythefreehold.com although it does charge a fee for a valuation report (but still better than paying a surveyor £500+!!) This new deferment rate applies across the country following the Cadogan v. Sportelli case in the Court of Appeal. This means all of us leaseholders paying through the nose to extend our leases whilst those freeholders out there are coining it in! Let's hope market forces change the rate for us.

M.Holloway

Here's another Lease Extension Calculator I got slightly different amounts so not sure which one is most accurate.

Valuer

This title is misleading in implying that the calculator does all the hard work; it just does the maths, which is the relatively easy bit! It is knowing what numbers to put in and what they mean which is the difficult bit! The comments here prove that any lay-person is going to have great difficulty with this.
While yields are generally 7-8%, the deferment rate can be between 5% and 6% depending on where you are; the Sportelli decision is becoming increasingly challenged for flats outside of London.
There is also the difference in value between the flat with the short lease and with a new lease, 90 years longer, (marriage value)to consider. The difference between all these variables can be tens of thousands of £’s.
While you may save £500+ by not employing an experienced valuer, you will probably end up paying £thousands more in premium as a result. I am a valuer and often see lessees agreeing premiums that are far too high because they don’t want to pay for a valuation. Great if you have money to burn, but most have not and it makes no sense at all.
By all means use calculators such as this to give you a rough idea of what you are in for, but rely on it at your peril. An experienced valuer will know what figures to put in and why and, more importantly, be able to argue and defend them against another valuer and, if necessary before a Valuation Tribunal. CAVEAT EMPTOR!

Abatement

Struggling to understand how you work out the "present market value with existing lease" because doesn't that depend how much the lease extension is going to cost?! i.e. if the Future market value is 200,000, and the lease extension cost is 20,000, that implies the current market value is around 180,000. But if the lease extension cost is going to be 30,000, the current market value will be around 170,000. It seems a bit circular! Can anyone shed any light?!