First-time buyer's leasehold woes

CH2IS

Hello,

I'm a first-time buyer, so please excuse my naivety.

I'm in the process of buying a flat and I've just received a mortgage offer.

I've had a nasty surprise: I've just learned the lease has 85 years to run when I was led to believe there was 900-odd.

I had not accounted for the cost of extending the lease and I'm aware of the looming 80-year marriage value cutoff.

What are my options? I'm minded to revise my offer (minus the approximate lease extension costs). Does that sound reasonable? How would doing so affect the mortgage offer, ie could I borrow less or lower the deposit? Should I extend the lease as part of the deal instead of waiting two years?

Any help would be much appreciated, especially if you can save me walking into any more traps!

Regards,

Chris

marksoton

I'd be walking away. Whatever made you think it was 900 years?

CH2IS

Estate agent and broker. The thought has crossed my mind.

marksoton

CH2IS wrote: »

Estate agent and broker. The thought has crossed my mind.

The vendor is probably playing games then. If they're lying about something that basic what else is to come....

Cakeguts

Don't buy it. Find something else. Annoying I know but there isn't anything you can do about this. Sometimes you can tell from the price that there is something not quite right about the property.

bouicca21

I'd be investigating extending the lease as part of the deal.

EAs are notoriously flaky on the subject of lease length and service charges, so I would also be checking the service charge - the vendor should be able to produce his/her bills for you to check. Also ask to see the lease so that you know whether there are any conditions you would find onerous. The worst one on mine is that we can't hang washing outside, but you might want to be sure about the right to have a pet (or not, depending on your interests) and whether there is allocated parking.

CH2IS

Yes, for all I know the service charge and ground rent I've been quoted's way off the mark too.

marksoton

CH2IS wrote: »

Yes, for all I know the service charge and ground rent I've been quoted's way off the mark too.

Well you can either instruct your solicitor to find out further or walk away.

With such a fundamental lie/mistake i'd be looking elsewhere.

[Deleted User]

Don't rely on what the EA or vendor tell you, only what you get via your solicitor. When you have the ground rent confirmed (as well as the service charge amount, conditions of the lease etc) you can use some online calculators to estimate the price of lease extension, then reduce your offer accordingly. After 2 years ownership you'll still have 83 years left, so it's not the end of the world.

I reduced my offer when I discovered that there were expensive works to the block coming up (contrary to what the EA told me). It wasn't a problem with the mortgage - just phoned up and told them the revised offer once it was accepted by the vendor. I was able to keep it aside from my deposit, and still have the same size of loan, because my loan-to-value was still within the maximum for my mortgage offer. But if you are dead on 80% of ltv, and drop the price, you'll have to reduce the loan and the deposit proportionally.

eddddy

There are a number of ways you can move forward, if you like the flat - including:

1) Buy the flat, wait 2 years - then start the statutory lease extension process

2) Tell the seller to serve a section 42 notice to start the statutory lease extension process before you complete - then you don't have to wait 2 years

Either way, find out what the lease extension will cost (including all the legal costs etc) - and reduce your offer by at least that amount.


Edit to add...

You will probably need cash to pay for the lease extension and legal bills, so you might need to review your finances.