Wrong Estate Agent Advice

dizzydoll

roonaldo wrote: »

Also, this post in the credit card section!

The OP is back for more :j

MothballsWallet

richards499 wrote: »

35 years where left on Lease

35 years isn't a lot really, imo - it's only about 1.5 generations, maybe 2 at a push - and also about 10 years more than the maximum term most mortgage lenders will offer (in my experience).

bris

35 years on a lease is practically unsellable, simply because the lease is to short for a lender to even consider the property for mortgage purposes, their advice was sound.

Your problem is trying to pass the cost of the lease on to a buyer, all the buyer see is the price difference betwen your and the house next door.

Fruit_and_Nut_Case

dizzydoll wrote: »

The OP is back for more :j

Yes, I wish (s)he would contact a Board Guide and get the thread moved somewhere more sensible.

ThemeOne

Did the other houses also only have 32 years remaining on the lease? It could be they'd extended the lease, or for other reasons had longer remaining.

Generally speaking, properties with such a short term remaining on the lease only sell at low prices, if they sell at all.

jonesMUFCforever

I agree - you would not get a mortgage on a 32 year lease so the house would be unsellable.
Your choices were to either extend the lease or buy the freehold.

bigadaj

jonesMUFCforever wrote: »

I agree - you would not get a mortgage on a 32 year lease so the house would be unsellable.
Your choices were to either extend the lease or buy the freehold.

Not unsaleable, just unmortgageable a cash buyer could purchase.

However in most circumstances buying the freehold would in all probability be worthwhile, meaning that the lease price plus the cost of buying the lease would be less than the freehold sale price.

Edit - maybe that's why it's on the credit cards board as it could be bought within the limits of many cards?

jonesMUFCforever

bigadaj wrote: »

Not unsaleable, just unmortgageable a cash buyer could purchase.

However in most circumstances buying the freehold would in all probability be worthwhile, meaning that the lease price plus the cost of buying the lease would be less than the freehold sale price.

Edit - maybe that's why it's on the credit cards board as it could be bought within the limits of many cards?

Would you then buy a house knowing in 32 years it would be worth nothing to you (unless you purchased the freehold or extended the lease) or worse how would you resell?
You are right that no mortgage lender would touch it.

bigadaj

jonesMUFCforever wrote: »

Would you then buy a house knowing in 32 years it would be worth nothing to you (unless you purchased the freehold or extended the lease) or worse how would you resell?
You are right that no mortgage lender would touch it.

As with any from of investment the question is for how much.

I remember a house being sold by which had some major electrical gear behind it. The sale was conducted with the full knowledge that at any time the electricity board could come along and demolish the house to gain access. It sold for around 5% of the normal asking price.

Similarly plenty of places being sold on the east coast which will get washed away, whether that happens in a few weeks or a few years is down to many factors.

The best way to look at a short lease is often to work from a typical rental cost and then calculate an internal rate of return with the cost degrading over the length of the lease.

roonaldo

richards499 wrote: »

The point I was trying to make was houses with the same time left on the lease are selling and still getting mortgage's, the last one sold got 32years mortgage!

No they didnt, someone is either telling you porkies or havent given you correct information (ie they paid for lease extension). No lender is going to agree to a 32 year mortgage on a 35 year lease house.

http://www.cml.org.uk/cml/handbook/englandandwales/question-list/321

Your post is about the agent giving you incorrect advice and how worse off you are for it. But as it turns out the agent gave you correct advice.

I hope this puts your mind at ease now.