Extending leasehold

principlecounts

Since putting my property on the market, I've discovered I'm below 80 years on the leasehold term, 75 years to be precise.

I've had about 5-6 views on my property with one investor declining based purely on the length of the leasehold term. There are a few other properties similar to mine for sale which are valued at the same asking price. Without knowing how long the leasehold term is, I don't know how realistic their asking price is. I'm aware now of the pitfalls of purchasing a property below 80 years remaining, however I do live in an area where properties are getting snapped up quickly, my questions are:

1) Has anyone actually purchased a property with a leaseterm 80 years or under, and then applied for a lease extension subsequently?

2) Is it worth extending the lease as I'm selling (in case I don't get any buyer), estimate is about 7-8 grand including marriage fee, though I haven't asked for estimates (any recommendations?)

I'm just really caught off guard at the moment and have drafted a letter to my management company describing an informal request to extend the lease for an additional 90 years. Martin's guide has been very useful too. I feel a bit cheated the E.A. hasn't mention anything - is this just industry practice to B.S.? Makes me curious why an E.A. would take on the property and still expect the property to sell at market rates. P.o.S.

Any feedback would be appreciated.

moon_river

We have been looking to buy a 1/2 bedroom property in SE, the majority of the properties that we have seen are leasehold.

The first property that we intended to buy had a lease of 80 years unexpired, so the property was priced accordingly.

In a buyer's perspective, we certainly prefer the properties that have long leases as it saves us lots of hassles (house buying is stressful enough!). Correct me if I am wrong but I think the buyer can only extend the lease once they own the property for 2 years. In your case, it will bring the lease length down even further.

http://www.lease-advice.org/calculator/

This calculator gives you a pretty good idea on roughly how much the costs are going to be if you decide to extend the lease.

I personally would extend the lease if I had the cash. With a very fast moving market here, the properties with lease length less than 80 years are not shifted as quickly from what I have seen. Good luck selling your property!:)

ethank

You can submit the notice to the freeholder and convey the benefit of this with the sale - so they don't have to wait the prescribed two years.

I sold my flat with 72 years left and I got a couple of grand under market price.

principlecounts

@ethank - when you refer to a benefit to the freeholder are you referring to the marriage fee the freeholder receives?

@moonriver - thanks for your perspective, I wish I did this last year, but here I am. I don't have the cash, but I am curious if the cost will outweigh the benefits. So I am encouraged to pursue it to get an estimate. And good luck yourself finding a property!

principlecounts

Just hand delivered a request for informal extension. Fingers crossed, but not banking on it, anticipating Section 42.

ethank

I did not explain this very well. There is a way of allowing a new buyer to extend without waiting two years.

Once you serve Notice claiming your right to a statutory lease extension on the freeholder, you can register this against your title and then sell your flat together with the right to claim the lease extension to the new buyer.

principlecounts

@ethank - yes, I'm considering this, I'm going to chat to my estate agents about it tomorrow. I want to service Notice to extend and get to a stage where the extension is pretty much guaranteed. But I need to get all the costing details to budget for it and see if it's worth increasing my property asking price in the process. I don't trust anyone regarding this matter, as I wasn't told myself from the estate agents, solicitors etc, when I bought the property, so I need to my facts right first. Thanks to the forumers in MSE, I'm getting there.

Many Thanks.