Leasehold - extend now or wait?

flashsnaps

HI all,

We have owned our flat 2years now and I am considering extending the Lease. It currently has 76years on it left.

I spoke to my solicitor and they didn't really push me either way but what they said if you are planning to sell in the next few years its common to extend the Lease as part of the sale of the flat.

Is it worth doing it now or just wait? I don't have any plans to sell in the next few years.

eddddy

If property prices increase, the lease extension is likely to get more expensive.

If property prices decrease, the lease extension might get cheaper.

(Because an increase/decrease in property values is likely to cause an increase/decrease in marriage value.)

So it depends what you think will happen to property values in your area.

flashsnaps

The property prices are on the up so I think that answers that question.

want2bmortgage3

Will you be here in 76 years?

eddddy

want2bmortgage3 wrote: »

Will you be here in 76 years?

Are you suggesting that it's pointless extending the lease, if the OP might be dead in 76 years?

If so, that's a misguided suggestion.

As the length of the lease shortens, the flat will gradually lose value. If the lease is extended, it will probably keep increasing in value.

So if the OP decides to sell in 5 or 10 years to buy something else, they will be better off financially, if they've extended the lease.

Even if the OP lives in the flat for the next 76 years, if the lease is not extended - it then becomes the freeholder's. If the lease is extended, the OP has an asset to leave to their children (or the cats' home).

HouseBuyer77

I think it's worth extending. Personally when I was looking for something to buy if it was leasehold with less than 83 years on the lease I discounted it as an option.

Yes you can do it as part of the sale but it complicates the sale process and you end up paying for it either way. Here you pay up front and get paid back in the higher selling price with the added advantage that you'll have more interested buyers with a longer lease potentially pushing up the sale price.

AnotherJoe

flashsnaps wrote: »

HI all,

We have owned our flat 2years now and I am considering extending the Lease. It currently has 76years on it left.
....

Is it worth doing it now or just wait? I don't have any plans to sell in the next few years.

In that case now is a great time to do it , while you're not in a rush, and there are no pressures to get it done, and it's as cheap as it will ever be to extend it.

cloo

I'd do it now. The fewer complications you have on sale, the better both for you and the buyer. We did ours at the same time as selling and it was one of the delaying factors as our freeholder's solicitors were totally incompetent. It was fortunate, in a way, that our first sale and purchase had gone belly up and our eventual vendors and buyers were patient, because the owners of the first house we were proceeding with, it became clear, were totally ruthless about keeping it on the market with the hopes of a higher cash buyer even after agreements to sell to someone else. There's no doubt they would have sold it to another purchaser from under our noses given the extra time the extension took!

flashsnaps

I have spoken to the freeholder. He has asked me to obtain 2 estimates of the flats value from estimate agents. He will then give us a price for to extend the lease. He suspects it will only be extended to 99years or 102years. Why will it not be extended to 125years?

economic

Freeholder can offer whatever he likes. If you don't like his terms then go the statutory route. Then you will get 99 years added onto the 78 years plus ground rent will be zero. Note however you will have to pay valuation fees and solicitor fees for you and the freeholder.

flashsnaps

I think the cost is going to be around £10,000 to get the lease extended to 99 years based on other recent flats in our building.


Any benefit of going down the statutory route apart from getting the lease extended to 125?


I cannot get my head round why the cost is so high for a lease exention and it's only going to go up to 99years. In 20years time we or someone else will have to pay the £10,000 again.