Leasehold Extension

Arthritic_Toe

cloo wrote: »

I'm pretty shocked anyone (unless it was the selling agent) advised you to buy at all with only 60 years on the lease. It's ridiculous that the lease system still exists, it's a total anachronism and a major cause of misery for so many people. I guess the problem is that they are assets that people have money invested in so you can't just magic them away. Sorry, no advice - I hope you find some way out.

It was a very different world in 2006. Anyone could get a mortgage for anything as house prices were rocketing and anyone who suggested the bubble may burst was laughed off as a doom-monger. Kirsty Allsop offered to eat her hat if prices ever fell. Northern Rock thought it was a great idea to offer 125% mortgages. People on minimum wage were driving round in BMW's. Gordon Brown sat smuggly at number 11 patting himself on the back for achieving steady economic growth, whilst turning his blind eye to the vast credit bubble. Mortgage advisors were filling their boots.

Hoploz

Surely it would be the freeholder you'd need to apply for the lease renewal from? The management company would only deal with the regular costs and accounts, such as building repairs and cleaning etc.

Good luck. You are in a pickle but I'm sure you'll find a way out. You are on your way already

Hoploz

BTW your short leasehold flat is not necessarily totally valueless. There are plenty of cash buyers out there. Clearly they will not pay full market rate, but if you did need to flog it and scarper you could do it. People buy short lease places on the basis they can rent them out till the end and make a monthly income profit. Depends on the ££ of course.

cloo

I note no one's mentioned marriage value (http://www.leaseextension-uk.info/marriage-value.html) which I presume would apply here? Though I'm not sure if it's mandatory or not.

Okrib

How many flats are there in the building? Given the information provided I don't see why you can't buy the freehold (if the other owners in the building want to and are on the same leases).

RDM2008

Hi All


Just a quick update on the leasehold, got the quote back from the Management Agents that are working on behalf of the freeholders and they have quote £34,500.00 for lease extension plus £895.00 + VAT legal fees plus £600 Valuation and processing fee, and I only have 1 month to take them up on there offer. It is like they think they are doing me a favour.


So I am now stuck in a property that I can't sell as no one will be interest buying it when a new lease is going to cost £35,000.00. So I can't move to a bigger property so my son and daughter can have there own bedrooms.


Spoke to the Management Agents and they have said I can seen and email and make an offer but there is no guarantee they are willing to reduce the price, which could take from 7 to 15 days for them to come back to me, so for the 1 month they give me to renew the lease half that time is gone waiting on them to see if they will take an offer that I can afford.


Really sick of this now, every turn I take it seems there is someone there that just wants to rob me of the money I work hard to earn.

eddddy

A freeholder can ask for any price they feel like. It's quite possible that their suggested price is hugely inflated. (And don't agree to any of their offers without taking professional advice.)

Perhaps the best solution is for you to get a valuation form a specialist lease extension valuer. Unfortunately, it will cost you a few hundred pounds.

If you wanted, you could then serve a section 42 notice and try selling the maisonette with a lease extension on completion.

But... based on the numbers in your first post, you may still end up in 'negative equity'. i.e. you wouldn't get enough from the sale to cover the mortgage and lease extension.


The problem is... if you don't extend the lease, the longer you leave things, the more 'negative equity' you will have when you sell.

RDM2008

Just spoke to a Leasehold extension Valuator and charges £400.00 + VAT for his services, might be worth the cost to get someone that know what they are doing to value the property.

princeofpounds

You really should go take a look at lease-advice.org. It's a government funded advice service to help people understand precisely these sorts of issues. Their material is pretty good, and you can speak to them on the phone.


For example, the first thing to understand about that lease extension price is, is it fair? Freeholders can ask for anything they like, but if they ask for a silly value or ground rent then you can always try to pursue the tribunal route for a statutory extension. So in practice most extensions go through at statutory prices plus a little bit for the convenience.


Apologies if you already have assessed this, but the way you talked about it didn't sound like you were considering things like this.


But ultimately it will not be possible to magic up value from thin air. It may well be possible to get a sale transaction through however.

It's ridiculous that the lease system still exists, it's a total anachronism and a major cause of misery for so many people

Believe it or not, the lease system actually exists for a very very good set of legal reasons.


It has some anachronistic features, but the law has moved almost entirely to the side of the leaseholder over the years, at least in terms of lease extensions (service charges and insurance, still some way to go).


That's quite remarkable really; imagine letting out your house to a 'normal' AST tenant and then finding out the tenant can renew indefinitely for peanuts, as long as they do it nine months before the tenancy runs out. The main difference is just one of timescale.

AdrianC

RDM2008 wrote: »

So I am now stuck in a property that I can't sell as no one will be interest buying it when a new lease is going to cost £35,000.00.

You will be able to sell it - but, of course, you'll get at least £35,000 less than if it didn't have a very short lease.

The lease system is the only system that can work for properties that can't easily have a line drawn around them on the ground. How could somebody hold the freehold on just one flat in a block?