Extend lease before marketing?

jamels2

I am looking to sell my flat once I can issue a s21 to give my tenant notice. The lease is down to 62 years and I can extend quite easily back to 99 direct with the freeholder. I have the money to do this via the overdraft facility on my mortgage.

So my question is , should I do this now in order to get the best sale price in a few months? Alternatively I could have the flat marketed with optional extension eg start off a s42 and assign to buyers name to complete. There is also the chance a cash buyer or older person may want to buy the flat for a lower price and not have the lease extended.

Any advice what I should do as I have another month or so before i will issue the s21 and grt things moving with an agent?

chrishar

Just extend it asap you will get the cost back in the asking price and have a straightforward sale.

Lewjohn

I wouldn't bother, there are plenty of cash buyers who won't care about the lease. They just want a monthly income, how many people here will be alive in 62 years? Just drop the asking price.

jamels2

Thanks for the conflicting advice lol still not sure whether to do it or not

ChemistDude

Do it, you will widen the market of people who could be interested in your property. I hear lenders don't like to lend on properties with short leases - this will therefore limit the market for your property unnecessarily and those who do want to buy it will want it CHEAP.

Also google 'marriage value', that kicks in when the lease is below 80 years (so as a prospective buyer I personally would only be interested in properties with leases >80 years as I could then get a statutory extension without paying an arm and a leg.

Also when you extend, it is usually for an extra 90 years.

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

Hoploz

Even if you don't do it yourself, you ought to at least get something from the freeholder which gives an idea of the cost.

62 is quite low so some lenders might not be keen, which may affect your market. I think you'd get the best price with a longer lease, but it depends how much it's going to cost you up front. The likelihood is a buyer is going to ask to knock off the cost from the asking price.

jamels2

Would it be sufficient to offer to serve a section 42 as part of the sale so the buyer can proceed with the extension after purchase?

marksoton

jamels2 wrote: »

Would it be sufficient to offer to serve a section 42 as part of the sale so the buyer can proceed with the extension after purchase?

Maybe. But as a buyer i'd disregard the property.

Why would they take the hassle?

dimbo61

Do you not watch daytime TV ?
Homes under the hammer, Kirsty/Phil make over programs !
Evict your tenant, clean and repaint the whole place.
Get professional photos taken !
Improve where you can and extend the lease now
You will have a bigger market and better price

always_sunny

marksoton wrote: »

Maybe. But as a buyer i'd disregard the property.

Why would they take the hassle?

What is the hassle? They just have to wait, so unless they plan to flip the flat... if the price is balanced...

marksoton

always_sunny wrote: »

What is the hassle? They just have to wait, so unless they plan to flip the flat... if the price is balanced...

Of course it's hassle.

As some of your own posts on the subject prove.