Buying a flat with 90 years lease - What to look for?

Baltak

Hello,

I'm looking for a flat to buy in London and I'm not really familiar with the leasehold concept. (No such thing on the continent...)
I've found a place I like with a 90 years lease. I've read that this can be extended after 2 years, but:
- Is this a given, or should I look at some please conditions that would prevent me to extend?
- Should I anticipate any issue with the mortgage? I was planning to mortgage for 20 years.

- Anything I should be aware of?


Thanks,
Julien

cashbackproblems

Baltak wrote: »

Hello,

I'm looking for a flat to buy in London and I'm not really familiar with the leasehold concept. (No such thing on the continent...)
I've found a place I like with a 90 years lease. I've read that this can be extended after 2 years, but:
- Is this a given, or should I look at some please conditions that would prevent me to extend?
- Should I anticipate any issue with the mortgage? I was planning to mortgage for 20 years.

- Anything I should be aware of?


Thanks,
Julien

No on 90 years you will have no problem getting a mortgage, I was looking at this problem as was thinking of buying a flat with 86 years remain. As long as you don't let it run to 80 years or less when you have to pay an heftier "marriage fee", then you are fine. I would still research what the extension fee will be and look into factoring into the offer price.

Also you don't always have to wait 2yrs, some management companies who are cooperative will let you extend immediately (after 2 yrs is when you are have legal right to enforce it).

At 90 years I wouldn't let it put you off, under 83/84 years would be slight concern.

benjus

cashbackproblems wrote: »

Also you don't always have to wait 2yrs, some management companies who are cooperative will let you extend immediately (after 2 yrs is when you are have legal right to enforce it).

The terms of the extension (particularly the term of the extension and the ground rent) may not be the same if you extend by agreement with the freeholder compared with extending via the statutory right to renew after 2 years of being a leaseholder.

Baltak

Ok, thanks !

marksoton

Buying a flat with 90 years lease - What to look for?

If it were me, the door.

You need to be very careful you don't get stung for the future and have everything completely watertight before proceeding.

SmlSave

marksoton wrote: »

Buying a flat with 90 years lease - What to look for?

If it were me, the door.

You need to be very careful you don't get stung for the future and have everything completely watertight before proceeding.

That's very short sighted. Short leases are the norm in London.

marksoton

SmlSave wrote: »

That's very short sighted. Short leases are the norm in London.

Hence the door....

The London market benefits the agencies and current freeholders.

It's a scandalous market full stop.

martindow

The agent is probably quoting the length of lease from what they were told by the vendor, who probably said it was 'about 90 years'.

I would take 90 years or any other round figure with a pinch of salt until you get a precise date from the lease. I would put money on it being a few years less - 86 or 87 years may be.

Still probably not a deal breaker, but don't accepts a precise date until you've seen a copy of the lease.

There have been posts here previously where the lease has been far shorter than originally quoted.

bouicca21

Another one for asking to see the lease. Never trust an EA to get it right. You want to confirm the length of the lease, the ground rent, and moving on from that, who manages the property for the freeholder, what the service charges have been, what they cover and whether there is a sinking fund.

Obviously all this would come out in the process of buying but it's just as well to have a heads up early. If I were selling mine I'd have no problem digging out the lease and service charge demands.

cloo

Yes, double check the years remaining - it could be quite a difference if it's not accurate


90 years is not bad for a London flat - if you are looking at conversion types like we were when we first bought, you'd be lucky to find anything freehold/share of freehold, so 90 years isn't bad, if indeed it is the case.


A lot may depend on the Freeholder. Are they contactable? Have the current owners had dealings with them and what were they like? Our freeholder lived upstairs and we knew gave the previous owners an extension for a fair sum, getting a valuation and doing it by the book. But be warned, there is, as far as I know, nothing stopping freeholders from more or less naming their price for an extension, though it can be disputed. And some do try to get whatever they can get away with.

moneyistooshorttomention

Add me to the ones saying - check the lease length is what you have been told. I've also read a lot of those threads on here where the estate agent lied and said a lot more years remained on the lease than actually was the case. Even if an EA lie is in writing on the particulars - don't necessarily trust it - because they are likely to also have those "weasel words" on there (in the small print) telling you not to rely on those details.