Lease question

padington

If a property is worth 230k and it has a 64 year lease. How much would you imagine renewing the lease would cost ?

the_flying_pig

depends - what's ground rent going to be for the remainder of the lease?

anyway, it'd cost a lot of money.

ballpark only:

if the lease was longer than 80 yrs you'd be talking about north of £5k to extend it.

but down to 64 yrs i'm afraid you're talking north of £15k, even the thick end of £20k if the ground rent is reasonably substantial.

padington

the_flying_pig wrote: »

depends - what's ground rent going to be for the remainder of the lease?

anyway, it'd cost a lot of money.

ballpark only:

if the lease was longer than 80 yrs you'd be talking about north of £5k to extend it.

but down to 64 yrs i'm afraid you're talking north of £15k, even the thick end of £20k if the ground rent is reasonably substantial.

Ground rent £300, service charge £600.

Found a handy tool here, MSE tool says not much change from 25k after costs ...

http://www.moneysavingexpert.com/mortgages/extend-your-lease#divTotalResults

Snakey

Interesting! I have a 96-year lease so while it's not a problem right now it will be when I sell in 40 years time, at which point I'll be of an age where I might not want the hassle of having to deal with solicitors etc.

I have wondered whether it's worth doing it in the next few years, just so that it's done and also to make sure it's as cheap as possible. Let me know how much hassle it was for you to do it, if you go ahead and buy the place.

padington

Snakey wrote: »

Interesting! I have a 96-year lease so while it's not a problem right now it will be when I sell in 40 years time, at which point I'll be of an age where I might not want the hassle of having to deal with solicitors etc.

I have wondered whether it's worth doing it in the next few years, just so that it's done and also to make sure it's as cheap as possible. Let me know how much hassle it was for you to do it, if you go ahead and buy the place.

You've got to do it in the next 16 years if you don't want to shell out unnecessarily otherwise you hit the magic '80' and you have to pay marriage fee's to the freeholder for being less than a life away from running out.

Also if some revolutionary medicine was created and life expectancy jumps up, the whole maths could possibly change against your favour.

the_flying_pig

padington wrote: »

Ground rent £300, service charge £600.

Found a handy tool here, MSE tool says not much change from 25k after costs ...

http://www.moneysavingexpert.com/mortgages/extend-your-lease#divTotalResults

i'm not sure that this page is the very best resource available, e.g. look at the idiot contributors they quote towards the bottom of the page.

Using back-of-the-envelope calculations I struggle a little bit to get the total as high as £25k, even with £300 p.a. ground rent... hmm, actually I maybe don't. It may boil down to how much the extension would improve market value. truthfully i have no experience of sub 80 yr leases.