Ball Park Cost of Lease Extension, 2 bed London flat?

cmdenny

Hi, I own a flat that is let to a tenant. I purchased it as a BTL in December 2013 with 83.7 years left on the lease, and intended to re-lease before it hits the 80 year period. I spoke to my Solicitor and she advised that I can't enforce a lease extension request until 2 years ownership (December this year), in the interim she advised writing to the owner of the freehold. The freehold owner is the flat upstairs (originally a Victorian house, now a conversion into 2 flats, I hold the ground floor property). The solicitor suggested writing to the free-hold owner to enquire about cost, at the same time I also mentioned an enquiry into purchasing a share of freehold. The letter to the freehold owner was sent 3 months ago and hasn't been replied to. My solicitor wasn't able to offer an opinion on the cost of a lease extension though did say the cost goes up after 80 years.

The property cost £238k, I spent £30k doing it up, and would value it at £360-380k now. It is North London, Bounds Green. It is a 2 bed ground floor flat with garden.

Does anyone have any experience at what a market rate cost would be for a lease extension before 80 years and after 80 years?

Also would it be challenging for someone to get a mortgage on the property if it doesn't have a lease extension and goes to 79 years, or 78 years? I ask as a budget is tight and I may have to sit on it as is for the time being. At this point I would really not pay money for a consultation/survey.

k12345678

Im not sure there is a hard a fast rule and its basically down to the Vendor.

My Freeholder extended my lease by 80 years (from 80 to 160) on a zone 4 flat for £500 (basically just his legal fees plus a little bit) because he wasnt fussed.

He could have charged me £20k though.

cmdenny

That's the thing that concerns me to be honest!

Any other experiences with costing would be appreciated from other posters.

cloo

Freeholders can kind of charge what they like, although it can be challenged in court. If they get a valuer in and base it on that they are doing the right thing... before selling our flat this year, we extended our lease from 82 to 125 years for about £4,450 + a grand or so in fees (£750 + VAT for solicitors drawing it up, a few hundred for the valuation). This was for a two bed, sold at £490k in Finchley.

You must get it through before 80 years, as otherwise there is 'marriage value' to pay, which is incredibly expensive.

At least (as was the case with us), your freeholder is upstairs. Could you maybe knock on the door and chat? They may simply be bewildered and not know what to say or do to the request - if necessary, walk them through the process and try and make it as easy as possible, offer to pay costs etc, though they will have to hire the solicitors.

cmdenny

Thanks, yes I guess I should just drop them a line. I've done my best to keep them on side, including decorating the communal hallway when I refurbished the flat, hopefully that will count for something, but you never know with people.