Leasehold Extension; what if the extension does not add value to the property?

OhSnap241

Hi

Ive recently had my property valued by an estate agent who tells me that the having my lease extended from 68 years to 158 years will not add any market value to my property at all. Would this affect the marriage value calculated during the lease extension process?

ILW

What has your EA based his statement on?

richardw

My guess is the EA wants to have a go at selling it now so he has an opportunity of earning a commission now.

bebewoo

Imho I would not even think of buying a property with 68 years left, so there must be others who think like that.

cattie

I think your ea is absolutely crazy to make such a statement & perhaps it's time he looked at a different profession as he obviously knows next to nothing about property.

I've recently bought a flat & have owned flats in the past also. A lease of 68 yrs would only interest me if it was priced very low to take into account the cost, time & hassle of me having to extend. Whereas a lease of 158 yrs would be very appealing to me at full market value.

Indeed, the 68yr lease may be considered unmortgagable with some lenders, whereas the 158 yr lease will have no trouble in attracting a mortgage at all.

Find yourself another ea, preferably one who knows what they are talking about.

OhSnap241

Thanks for the replies, im finding this all very stressful at the moment!

The property has been valued at 50k but realistically would sell for 45k, one in the same block has recently sold for 43k with the 68 year lease.

Ive been quoted a figure of between 8 and 12k (including the fees) and i know that this will take time as the freeholder is being very difficult; he has demanded a premium of 17k to increase the lease to 99 years.

I just cant see the lease extension adding value which i will get back from the sale considering the size of the property (very small) and the area (not very nice). This makes me very relucant to extend the lease knowing that i have little or no chance of recouping the loss.

Does anyone have any advice?

richardw

How much has one sold for in the block with a much longer lease?

It is highly likely you'd have to go down the 1993 act route to get a good lease extension, rather than on the freeholder's terms.

Another option is starting the 1993 act lease extension route and then assign the right to an extended lease with the sale of the flat when you got to that point.

Do you have to move at the moment?

Btw there's this thread https://forums.moneysavingexpert.com/discussion/3825027 with lots of information.

hazyjo

It might not add value as such, but it would make it actually sellable. As it is, it'll probably be cash buyers only.

Jx

ValHaller

I would assume the agent has a buyer in mind for whom a lease extension is of no interest - eg some sort of cash buyer.

OhSnap241

richardw wrote: »

How much has one sold for in the block with a much longer lease?

It is highly likely you'd have to go down the 1993 act route to get a good lease extension, rather than on the freeholder's terms.

Another option is starting the 1993 act lease extension route and then assign the right to an extended lease with the sale of the flat when you got to that point.

Do you have to move at the moment?

Thanks for the link to the advice.

All of the apartments in the block are on the same lease and there havent been any others sold recently.

Ive wanted to sell for years but one think after another has stopped me and now the thought of staying put or renting and dealing with this in 10 years is just hearthbreaking.

Starting the extension for the next person may be an option i can look into. Ive invested so much in this property it would just feel like throwing good money after bad to keep it.

HildaM

We were supposed to be extending our lease to put our flat on the market, but my husband got persuaded not to bother by a smooth talking EA.

He said it didn't matter that we only had 61 years left on the lease.
He said we didn't have to bother redecorate, although our place was VERY shabby.
He said we shouldn't bother declutter.

Amazingly, he was right. The first person to see it offered just 2% below the asking price. He wasn't a cash buyer and he DID manage to get a mortgage, even with only 61 years left on the lease.

Our flat sold for £18,000 less than the advertised price of flats with extended leases. It would have cost between 18 and 20K to extend the lease.

Seems the smooth talking EA did know his stuff.