Buying leasehold house, 76 yrs on lease

Grumpygirl

Hi all
Hope someone might be able to help please.
Ok, my partner has just had an offer accepted on a house. It's currently lease hold.
Price agreed is £115k
Lease has 76 yrs left.
At this point the estate agent hasn't said much to him about the short lease, he has been searching the net.
We understand that he can buy or extend the lease after living there for 2 yrs. we also understand about the marriage fee.
Should the vendor be sorting this out before sale? As in, they should purchase/extend the lease?
Was wondering if anyone had been in this position themselves.
Thankyou in advance.

tim123456789

76 years is not what most professionals call "short". It at the lower end of acceptable.

It will make a difference to the value but for a 100K property that will amount to about 3K. It's impossible to tell whether that has already been taken account in the EA's value.

The vendor will have to sort it out if that's what the purchasor want's and he really needs to sell. OTOH he could just wait for a buyer who isn't as fussy!

HTH

tim

propertyman

Grumpygirl wrote: »

We understand that he can buy or extend the lease after living there for 2 yrs. we also understand about the marriage fee.
Should the vendor be sorting this out before sale? As in, they should purchase/extend the lease?
Was wondering if anyone had been in this position themselves.
Thankyou in advance.

Well the wrong advice has been found, this is a house.

The vendor can sell it on the existing lease, it is their choice whether to increase the value by seeking a free statutory 50 year extension, a negotiated extension, or enfranchising- purchasing the freehold.

http://www.lease-advice.org/publications/documents/document.asp?item=15
print it out read it and then beat the EA with it as they should know the rudiments of this :eek:or go back to selling double glazing.

The two issues you have are
1: is the price agreed reflecting the 76 years which is relatively short- often the for sale price reflects a house without taking the lease length into consideration- you are likely over paying

2: Will you lender lend on it?

Your first thing to do is get it-valued asap- so any price change can be dealt with now.

As to advice many fail to appreciate that extending a flat lease is completely different to extending a house lease.

Don't panic just work through the guidance from the intro bit.

Leaseman_2

I agree with Propertyman &would also add that it's best to get this sorted early rather than leave it as time passes surprisingly quickly (and the cost rises) for the owners of short leases! Broad brush advice for houses is to secure the freehold.

Richard_Webster

I would be telling the seller that nobody in the right mind would consider buying a house with a lease of less than about 200 years. Find a freehold house and buy that instead.

If the lease was for 99 years 20 years ago then some developer was conning a load of innocents who were silly enough to buy leasehold houses with a 99 year lease at all. Sadly they got away with it because there were enough peole out there who did not realise that years later they would be taken to the cleaners by some property company who had bought the freehold reveresions from the developer.

angelofdebt

We were sold a masionette as first time buyers, as advised by our mortgage advisor. The lease was for 65 years. We were told that it would cost us around £200 to renew.
I feel we have been mis-led as I would not have even considered buying the property.
We were not warned anything about leasehold properties with a short lease.
Our mortgage company Northern Rock (in 2006 before the problems and when they were dishing out 100 percent mortgages) didn't think this was a problem.
The only advice we received about leasehold property was that the mortgage lender "might not lend us the money, so, fingers crossed while we wait for that to go through" at this point in 2006 while we waited for our mortgage to goo through it was like waiting for Chris Tarrant to tell us the answer, such was the tension in the office, "That's all gone through nicely there" the lovely mortgage advisor told us. I'm sat here now and i'm thinking "of course it !!!!ing did"............
I feel really angry at this because i'm not sure if we'd been played like suckers cos we were firsttime buyers or if we should have been aware

Leaseman_2

Angelofdebt...
Check with a proper solicitor asap. Someone should have warned you but I fear you may have left it too late...

partialycloudy

angelofdebt wrote: »

We were sold a masionette as first time buyers, as advised by our mortgage advisor. The lease was for 65 years. We were told that it would cost us around £200 to renew.
I feel we have been mis-led as I would not have even considered buying the property.
We were not warned anything about leasehold properties with a short lease.
Our mortgage company Northern Rock (in 2006 before the problems and when they were dishing out 100 percent mortgages) didn't think this was a problem.
The only advice we received about leasehold property was that the mortgage lender "might not lend us the money, so, fingers crossed while we wait for that to go through" at this point in 2006 while we waited for our mortgage to goo through it was like waiting for Chris Tarrant to tell us the answer, such was the tension in the office, "That's all gone through nicely there" the lovely mortgage advisor told us. I'm sat here now and i'm thinking "of course it !!!!ing did"............
I feel really angry at this because i'm not sure if we'd been played like suckers cos we were firsttime buyers or if we should have been aware

We are in the exact same position!
FTB in 2007 and bought a flat that had a 64 year lease...we were told by the EA to check with our mortgage company that they would lend on a 64 year lease....they would..yay we thought.
We were also told the flat was priced "slightly" cheaper then the normal market price to factor in the short lease.....we bought it at £155k so not that cheap.
5 years down the line we want to move, EA comes round and says "You HAVE to extend the lease, the flat is unsellable with a 59 year lease". Even the EA that sold us the flat 5 years ago said the same thing.
So... we get a quote to extend the lease....£18000 to extend or £19000 + fees etc to buy the lease.
We were floored we had no idea it would cost so much to extend and it won't even add that amount in value to property (from our purchase price) so we have had to take out a ten year loan to pay for it.

I will NEVER touch a leasehold property again! And I would advise anyone else to stay well clear of them also.

hazyjo

partialycloudy wrote: »

We are in the exact same position!
FTB in 2007 and bought a flat that had a 64 year lease...we were told by the EA to check with our mortgage company that they would lend on a 64 year lease....they would..yay we thought.
We were also told the flat was priced "slightly" cheaper then the normal market price to factor in the short lease.....we bought it at £155k so not that cheap.
5 years down the line we want to move, EA comes round and says "You HAVE to extend the lease, the flat is unsellable with a 59 year lease". Even the EA that sold us the flat 5 years ago said the same thing.
So... we get a quote to extend the lease....£18000 to extend or £19000 + fees etc to buy the lease.
We were floored we had no idea it would cost so much to extend and it won't even add that amount in value to property (from our purchase price) so we have had to take out a ten year loan to pay for it.

I will NEVER touch a leasehold property again! And I would advise anyone else to stay well clear of them also.

Didn't you think to find out how much the lease extension might cost? Didn't your solicitor advise you that with each year that passes, the cost to extend will increase?

These quotes to extend are sometimes/usually negotiable.

Five years ago, they were lending on shorter leases. Then the recession came along and they're more cautious. If you were buying it now instead of five years ago, you'd be unlikely to get a mortgage on it with 64 years left on the lease.

Good luck.

Jx

partialycloudy

hazyjo wrote: »

Didn't you think to find out how much the lease extension might cost? Didn't your solicitor advise you that with each year that passes, the cost to extend will increase?

These quotes to extend are sometimes/usually negotiable.

Five years ago, they were lending on shorter leases. Then the recession came along and they're more cautious. If you were buying it now instead of five years ago, you'd be unlikely to get a mortgage on it with 64 years left on the lease.

Good luck.

Jx

Our solicitor gave no advise re the lease...and as a FTB why would we think to get a quote for the exstension if no one had mentioned it WOULD need to be done. At 21 years old, a 56 year lease seemed like a long time when we only planned on staying for 5 years or so.

Yes some are negotiable and we did negotiate, and got about £200 reduction!

Anyway I have just transferred the £19,254 to our solicitors for the freehold, so from Wednesday I will be the proud owner of a stupid bit of paper stating we own the share of the freehold....whoppy do!

angelofdebt

CapitalLeasehold wrote: »

Angelofdebt...
Check with a proper solicitor asap. Someone should have warned you but I fear you may have left it too late...

Left what too late?