266% ground rent increase if Lease is extended

superfluffydinosaurs

I asked for a quote from simarc property management as my remaining leasehold is approaching 70 years.

I currently pay £75.00 a year ground rent, but if I increase the length of the lease back to 100 years, the annual ground rent increases to £275.

I can't get an answer from Simarc as to why the increase is so big. They don't provide any service to me, it’s just ground rent.

The other option is to purchase the freehold which together with legal costs is £4000.

Do I have any options? Is this typical?


Thank you for your advice

neas

with those figures i'd purchase the freehold. 15 years ground rent and you willhave paid the £4k.

Kynthia

Is this for a flat or house? A freehold flat is diificult to mortgage.

superfluffydinosaurs

Sorry forgot to mention its a house. I guess every one in the street will soon be having the same issue shortly if they have not already brought the lease hold.

ValHaller

£4000 on a mortgage at 5% for 30 years is cheaper than the ground rent.

thequant

No Brainer, buy the freehold.


Apart from the straight forward buy v lease comparison.


You will have immediate up lift on your house value.


and also do you want to have to ask the freeholder permission every time you want to do something to YOUR house and have to PAY for the privilege?

ethank

The 4k seems very cheap, does it include your own legal costs or just the landlords?

AndyGuil

If you have owned the leasehold for 2 years you have the right to add 99 years to your current lease and peppercorn ground rent.

superfluffydinosaurs

That’s an interesting point - about my legal costs - I had not considered that.
The have offered to sell the freehold purchase of the above property for the sum of £3,640 together with legal costs of £480 inclusive of VAT (presumably theirs).
I’m going to have a chat with CAB as soon as I can get an appointment. I think I'm going to have to buy the lease.

superfluffydinosaurs

[FONT=Arial,Helvetica,sans-serif]I've looked into the The Leasehold Reform Housing and Urban Development Act 1993 (as amended)
Which is legislation which provides an opportunity for an additional term of 90 years, at a peppercorn rent which is basically the same as being rent free.
source http://www.leaseholdadvicecentre.co.uk/Lease%20Extension.htm
I'm definitely going to contact the Lease holder armed with this information. The CAB person I rang did not have anything useful to contribute.

Thanks for the top tip!
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