extending lease on flat (not rented)

sandy2_2

Can someone please give me some information on how to buy more years to extend the lease on a flat, what period of time should we go for, what are the approximate costs involved, does the leaseholder have to sell more years to you, say we wanted to buy 25 years and they only wanted to sell 10 can they do that. What else should we ask, know about
Has anyone else done this, what are the pitfalls, if any
We want to extend the lease so it will be more acceptable to a mortgage company if we sell it in the future.
Thanx

blonde_one

Have just sold my flat, 78yr lease so i've said i'll extend the lease at the same time of sale (so less solicitors costs). From what i've been told with my landlord extending the lease to about 150yrs will cost me about £4k (a lot cheaper than i'd read about) but i've incorporated that into the cost of the sale.

You can sell without extending hte lease but from what i've been told the mortgage companies require at least 75yrs and people are now more savvy re needing longer leases or having to fork out more money - I knew nothing of this when i bought the flat and it only had 86yrs left on the lease.

Good luck.

cattie

Usually when you extend a lease it will be extended to the term of the original lease, ie from 75yrs remaining back to 99yrs. With leases there are generally set periods that they are granted for, 99yrs, 125yrs etc.

If you've owned a property for 2yrs then you have the legal right to a lease extension. Costs depends on various factors. If the lease has less than 80yrs remaining then it'll cost more to extend than one with more than 80yrs. This is because of something called marriage value.

These are the best people to get advise from regarding all aspects of owning leasehold property, including extending leases & buying the freehold. You'll find information on marriage value there. http://www.lease-advice.org/newintro.htm

keeperbear

cattie wrote: »

Usually when you extend a lease it will be extended to the term of the original lease, ie from 75yrs remaining back to 99yrs. With leases there are generally set periods that they are granted for, 99yrs, 125yrs etc.

This is a good rule, but not always the case. My property orginally had a 99 year lease, but the freehold was recently bought by our management company (of which every property owners on my estate holds one share). We are currently being offered 999 year lease extensions as we effectively own the freehold through the management company. The cost is around £3k.

jammyjam

Many mortgage lenders insist on at least 50 remaining on the lease at the end of the term of the mortgage, so if you are below 75 years (50 + 25 years average mortgage term) then you will need to think about this. The lease is usually extended back to the original term of say 99 years.

It depends on who the Freeholder is as to how much it will cost. When I sold my flat which had 66 years remaining on the lease, I extended back to 99 years to ensure a sale would go through. This cost me around £8,500 plus fees! My Freeholder was a big investment company and I was advised that if I challenged the amount then I would lose.

Also beware that a lease extension will allow the Freeholder to update the ground rent to a current market value, so my ground rent rose from £14pa to £170pa. They also included a clause to review the ground rent again after 10 and 20 years! Hopefully, your experience won't be as bad as mine, but I will never buy another leasehold property with only a 99 year lease. It can be a licence for the Freeholder to print money.