Lease Extension _One defnitive formula that can be used

Habib2342

Hi All,

today I attended an auction for the first time to see how it runs etc..

One person made an offer on a two bedroom flat priced at £145k but only 20 years left on the lease.

To me, Im thinking the cost of the lease extension will be astronomical ( £40k+, at least ) so my question is this;

Is there a definitive formula/website one can apply to all leasehold properties that one can use to work out how much it will cost to extend the lease ?

To my surprise the property mentioned above actually went for £170k so if the lease extension costs about £40k and the buyer sells it on the open market for at least £230k, then i guess its good business, no, ?

G_M

http://www.lease-advice.org/calculator/

Of course, the bidder(s) may have been naive FTBs who had not checked the legal pack and did not realise the lease was 20 years. Or did not understand the implications.

From reading some posts on the forum, there are more of those people than you'd expect..........

eddddy

Habib2342 wrote: »

Is there a definitive formula/website one can apply to all leasehold properties that one can use to work out how much it will cost to extend the lease ?

There are online calculators that will give you an indication of the price for a statutory lease extension.

However, the formal process is likely to go roughly like this:

1. You pay a valuer to do a lease extension valuation
2, The freeholder gets a valuer to do a lease extension valuation (you have to pay for this valuation as well)

Typically, your valuer will value a bit low and the freeholder's valuer will value a bit high.

3. The valuers negotiate (or argue!) to try to find a compromise
4. If a compromise can't be reached, it goes to a tribunal to decide.

You have to pay all your own legal/valuation fees, as well as all the freeholder's legal/valuation fees.