sub 100 year lease

catoutthebag

I am looking at a flat.
It's got 92 years on the lease
Is this an issue?
Someone told me not to touch if under 100 years

What happens with leases? Everyone in thr apartment has been to club in to buy a new one? When does that happen?

I might be in thr flat under 5 years. .would this be an issue for a buyer or selling?

Thanks

eddddy

Hi catoutthebag

Most people would be fine with a 92 year lease.

You should aim to extend your lease before it gets down to 80 years - because the price will start to go up more steeply after that.

You can extend the lease for just your flat, but if a group of you do it together, it may reduce legal costs.


In terms of resale with 87 year lease vs extended lease...

... some people would prefer it with the 87 year lease, because it's likely to be cheaper, and they can then 'save up' to pay for the extension later.

... other people would prefer to have it already extended. It will cost more, but it saves them the hassle.


Here's some general info: http://www.lease-advice.org/publications/documents/document.asp?item=8

benjus

If you buy now then do nothing to extend the lease it will be harder (but still by no means impossible) to sell after 5 years. However, it's still well over the 80 year threshold, after which it gets considerably more expensive to extend a lease.

After owning the property for 2 years you will obtain the statutory right to extend the lease. Use the lease extension calculator on this site to see what sort of cost you might be talking about.

An alternative to extending the lease might be to club together with other leaseholders to buy the freehold, then extend your leases for nothing (except legal fees, which will still apply, but may be lower if you do it together with the freehold purchase).

catoutthebag

Thank you.

I'm still confused by all this.

So is 80 years or more considered 'acceptable' range in terms of not having cost of extending escalate and also selling quick and not cheap and not scaring off buyers?

If I move in I won't know anyone.

Assuming no one wants to club together, is there a rough figure I should look for in total for extending the lease on my flat? Would extension be to 125 years? Can I do this straight away or after 2 years? Can I club in with say just one other party? If others are renting (some will be), this won't apply to them and I contact landlord?

Would you still touch the property?

I haven't seen many or looking hard but I know this one is lovely. Right area and right price. Nothing else matches it

Would you still proceed?

Is this a good negotiating tool?

benjus

Statutory lease extensions are for 90 years on top of the current lease at peppercorn (i.e. zero) ground rent, I think. Of course, you can also negotiate a lease extension with the freeholder but the terms may not be so good. As I said before, look up the estimated extension cost using the calculator on this site.

The cost of extending increases gradually as the time left on the lease gets smaller, until it gets to 80 years when it jumps by quite a bit, then increases gradually again.

To buy the freehold you'd need to convince at least half the leaseholders in the building; to get a lease extension done together to save legal fees can be as many or as few as you like.

92 years isn't bad and I wouldn't be fazed it if the property was perfect, but I would calculate the approximate cost of extending it and factor that into my plans.

lovehackney

I would be put off buying a flat with only 87 years on the lease (i.e. when you would come to sell it), because, if the buyer is already at the top of their budget, they then have to think about saving enough to extend it in a couple of years time, which would mean they were willing to pay less for it (and I probably less than 'market value with a short lease' because of the hassle and uncertainty of future circumstances for saving).
So, to be honest, even 92 years would put me off, because I would know that when I resold, it could be an issue.

Hope that makes sense..

catoutthebag

16-19k plus costs to extend

I may well be there only a few years (2-3) depending how my life and circumstances change.

Or may be longer.

Don't know what to do

catoutthebag

There's another 1 bed (one I mentioned was 2bed)....9 99 year lease...and 15k less...Obviously stops potential lodger...but with a lower repayment I won't need one (didn't like the idea of it anyway)...plus very nicely done

Hmmm