70 year lease on a property

BULLNOTBEAR

Proceed with caution leasehold purchasers. Just think about when you think will sell the property and how long will be left on the lease at that time. If you wouldn't fancy it at that time then others wouldn't either hence the lower values with leaseholds with less than 75 years left. 100% mortgages on a lease of 70 years is very risky. Most solicitors would say stay clear and I can't see a mortgage offer being made.

As with other posts. ask for price to extend lease. if you can't afford it now then unlikley you will afford it in 2-3 years time when the extension will cost more.

saunaboy

yep,

looking like a no-win unfortunately.

contacted the vendor & he's working on it, but I guess that a lease extention will make out original offer obsolete - what I mean by this is that if he extends from 70 yrs to 99, he'll add value. If I was his solicitor I'd advise him to raise the asking price to the new value to recoup some of his expense. That would price us out of the deal. We've got an asking price offer in now but can't (and aren't willing to) go any higher.

Tell you what though. Talking about this at work has panicked a few folk. One of em has lived in a leasehold for well over 20 years, and bought it from someone who'd been there for 10 years so they're panicking that they're in a flat with maybe only 55-60 yrs left. They bought for 20k but it's now worth 150k maybe on market....how much in reality with a 60 yr lease ????

oops. wonder how widespread this non-awareness is ? Easy to buy, settle, have kids etc & forget about it ???

saunaboy

There's no way I'm buying unless the seller extends the lease. Too much risk. Even if he offers to drop asking price further we've got no idea how much payment we'd have to make to extend.

emg

The other thing to bear in mind is the length of peoples mortgages. My broker tells me that a lot of FTBs are now getting 30 or 35 year mortgages, I imagine this trend is going to increase as people borrow higher multiples and need to be able to afford the monthly payments (the idea is you can decrease the length each time you change your mortgage by increasing your payments over time). My mortgage company needs there to be 40 years left on the lease at the end of the mortgage so as mine is a 30 year mortgage I didnt consider anything below about 77 years ( I figure I will probably move on after a couple of years and want it to sell easily without lease issues to the next buyer).

typeractive

hmmm - all very interesting.

I am also a FTB. Looking to buy a flat. therefore leasehold also. for details, see the link in my signature - might prove to be useful to some people?

I've put in an offer for a flat with my family. The lease is 68years. Asking price 64k, my offer 61.5k. In first chats with my family they said they would extend the lease to 70 years. However, I myself like many others would like more than this. Being family it's a difficult one. I know of the 2 year rule (didn't know they could sign it over to me - which I fear they will do, and leave me to extend it myself). I don't want them to do this.

How can I negotiate with them to extend the lease? How long should I ask them to extend for? I imagine the cost of doing so will be a lot. The flat belongs to my great aunt whom lived there for a lot of years - over 25. However it's her daughter whom is dealing with the sale, and is being much more business like - which I can appreciate, but not willing to budge on much at all. When putting in an offer, I worked out a percentage to start negotiations, but they won't budge. As far as she sees it, she thinks I can get a mortgage on the 68years - and that's all that matters. I want it to be longer.

Why is it soooo expensive to extend the lease? I read about how to work it out, but didn't quite understand it.

Also my aunt think i can use the same firm of solicitors - is this wise? I'm sure they won't give me any duff advice, as it has to be legal.

Freakin' leases! :S

Running_Horse

My friend who works in a solicitors office says don't touch any leasehold property with a ten foot pole, admittedly not an option in London. From memory, during the last major property slump it was small and old flats that suffered the most.

typeractive

I guess that comes from an invetment point of view? The thing is I like the property too :S Property sucks!

Running_Horse

More from a simplicity point of view, freehold is better if you can afford it. But yes, I knew so many who got stuck with unsellable flats in the 90s.

cattie

Running_Horse wrote: »

More from a simplicity point of view, freehold is better if you can afford it. But yes, I knew so many who got stuck with unsellable flats in the 90s.

And I also know plenty of people who were stuck with unsellable freehold houses during the same period.

Alas, all flats are leasehold, even the one's with share of freehold, so if people want to live in a flat rather than a house then there is no choice other than leasehold.

Flats will always appeal to a large percentage of the population, especially in big cities like London, Glasgow, Manchester etc. Just like houses will hold great appeal for families & people ready for the more suburban way of life.

pigeonpie

not too easy to avoid leasehold in London :-(

One other thing is if you want to buy the freehold, a shorter lease equates to a more expensive freehold. If you do this though, you can grant yourself/ves long leases afterwards.