Leasehold approx 83 years

Threebabes

Hi

We are getting our house valued next weekend to hopefully sell.

I rang one estate agent who said that 83 years leasehold isnt really long enough, and we should think of extending to at least over 90 years.

I have paid the £48 fee so they will send me the details (Simarc) but after googling it seems like its going to be a largish fee, a few thousand.

I am after opinions if this would put you off if you were a potential buyer.

Thank You

ripplyuk

It wouldn't put me off but the price would have to reflect it. I don't think it'd make much difference being 83 or 90 years. It may well matter to those who have children and want to leave the house to them, or are buying as an investment etc but it would depend how easy/difficult extending the leasehold is likely to be. Also, the area the house is in will make a big difference.

My friend's house is leasehold but it's 999 years yet they still have a contract with lots of rules about what they can do, some being daft things like not 'beating carpets' outside at certain times!

katejo

ripplyuk wrote: »

It wouldn't put me off but the price would have to reflect it. I don't think it'd make much difference being 83 or 90 years. It may well matter to those who have children and want to leave the house to them, or are buying as an investment etc but it would depend how easy/difficult extending the leasehold is likely to be. Also, the area the house is in will make a big difference.

My friend's house is leasehold but it's 999 years yet they still have a contract with lots of rules about what they can do, some being daft things like not 'beating carpets' outside at certain times!

I wouldn't buy a leasehold property with under 87-90 years on it. Sold mine just in time with 87 years left. You might find that your buyer insists on you extending yourself.

AnnieO1234

As years reduce the cost of buying the freehold increases, and you have to have owned the property for two years before you have a right to buy imp the freehold. Many buyers will either seek purchase or extension by vendor, or a reduction on price against their future costs.

X

cattie

A lease with 80yrs or under remaining is more costly to renew than one with 80+ years.

At 83yrs, your lease will not appeal to everybody but really you have 2 options. Market your flat as it is & priced to allow for the need for new owners to extend the lease in the very near future. Or start the extension process yourself before the sale for it to be completed by the new owners. This will help the property look much more attractive to potential buyers.

A buyer may extend a lease before waiting for 2yrs of ownership providing the freeholder agrees.

Is this a house or a flat? If a flat, is it in a block & how many other properties does the block contain?

Threebabes

Hi

Its a house.

Fluffi

Personally it would put me off because its getting to close to the point where the mortgage companies get particular about lending and the house will be more difficult for the new owner to sell once it drops below 80 years. Therefore a prospective owner is looking at a hefty bill in 2-3 years time to pay for the lease extension, as well as all the stress of finding conveyancers, valuers etc.

Given that lease extension cost are related to the property price and term left on the lease it'll be more expensive to extend in 2 years than now too.

A lease extension adds 90 years to the lease, so your current 83 year lease would become 173 years with no ground rent making a much more attractive proposition to potential buyers.

http://hoa.org.uk/advice/guides-for-homeowners/i-am-managing-2/should-i-extend-my-lease/

AlexMac

Look at this website's advice and calculator at
http://www.moneysavingexpert.com/mortgages/extend-your-lease
This explains why it will put some people off- in fact it is putting me off as I only looked at these pages and used the calculator as I'm currently looking for a property and am getting shown places with leases under the magic 80 years, when costs to extend rocket. If I liked any of them, I'd expect a big reduction to compensate me for costs and hassle. I've already walked away from one at 71 years.

It will cost you say £2-4k now to extend it before you sell, and you have the right to do so if you've owned for over 2 years, but if your purchaser buys now, is sloppy or forgetful and then waits 10 years- it will cost them anything from £10-20k to extend a lease of say only 70 years.

So, given that it will be touch and go for a buyer to complete, then own for two years and do the lease extension before the magic 80 year deadline, you may have a problem.

If I was you, I'd swallow the £fewk now, just in case it doesn't sell fast. Or at least consult a solicitor about starting the process and when costs apply.

As the MSE webpage says, 83 years may seem OK to you now, but "It will be virtually unmortgageable under 60 years , so (your buyer) will struggle to remortgage (then). If (they) want to sell, (they'll) probably have to flog to a cash buyer or shift at auction.

Good luck

Threebabes

Thanks everyone.

I will see what they come back with extending, then pay again to see how much it is to buy.

Fluffi

This calculator might be helpful. http://www.lease-advice.org/calculator/ you will have your own and the landlords costs to pay on top of this approximate figure.

robatwork

Shock! Agent speaks truth!

Less than 90 years will put a lot of people off, and anything over 100 (or better 125) years will prove much more appealing to buyers. Worth extending even if a few thousand.