Below the magic 80!

Ritchie_T

Hi all, I have a flat near Bournemouth that I'm putting on the market as soon as possible. It's a first floor flat with the only other flat being the ground floor flat. I have 77 years left on the lease, and so wish to extend before I sell.

I had the flat valued at £190,000 a couple of days ago without telling the estate agent about the lease length. My question is, how much value would I lose from the £190,000 with only 77 years left on the lease?

Any help appreciated, thanks
Ritchie T

divadee

How many bedrooms? I am near Bournemouth and know the property market well as just in process of buying a property. Also depends on area.

Pixie5740

Are you planning on extending the lease as part of the sale or just selling it "as is" with a 77 year lease? If it's the latter you'll be pretty much restricted to cash buyers only.

Have you asked the estate agent who valued the property at £190k what the value is with a 77 year lease?

Ritchie_T

Pixie5740 wrote: »

Are you planning on extending the lease as part of the sale or just selling it "as is" with a 77 year lease? If it's the latter you'll be pretty much restricted to cash buyers only.

Have you asked the estate agent who valued the property at £190k what the value is with a 77 year lease?

I'm planning on extending the lease before I put it on the market. I'm going to phone round some estate agents tomorrow. I just thought I'd ask on the forum to get as many opinions as possible.

Ritchie_T

divadee wrote: »

How many bedrooms? I am near Bournemouth and know the property market well as just in process of buying a property. Also depends on area.

It's a 2 bedroom property located in Iford between Christchurch and Bournemouth.

Ritchie_T

What is the amount of years I would need to extend the lease to bring my flat back to full value?

eddddy

Ritchie_T wrote: »

What is the amount of years I would need to extend the lease to bring my flat back to full value?

A statutory lease extension would add 90 years to the lease and reduce the ground rent to a peppercorn.

(Be very careful about agreeing different terms from those, especially if they include an increased or rising ground rent.)

A statutory lease extension typically takes between 6 months and 18 months to complete.

divadee

I know exactly where that is. Used to live in xchurch.

I would say as above with the current lease it's cash buyers only. And for that you would probably get 160k. . That's what I have seen 2 beds with short leases in decent ish areas go for.

At the moment in the area a lot of flats are being reduced in price. I think personally they were over priced before and buyers are being more cautious and sellers who actually have to sell are being more realistic.

A lease extension would be quite expensive as you have the marriage value to add in now it's below 80 years. So you will need to do your sums. If you just want rid quickly you would need to find a cash buyer.

AFF8879

I don't think you'll necessarily be restricted to cash buyers. Leasehold flats definitely lose value below 80 years as you say, but this isn't the same as cut-off for getting a mortgage. I'm sure a good number of lenders would lend to you at 77 years, but you can expect a fairly significant reduction in market value. It's a buyers market currently, at least sentiment is pointing that way, plus the new buyer couldn't extend for 2 years, which puts a lot of people off...

eddddy

Quite a few mortgage lenders will lend on a 77 year lease - see:
https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/1846/


Some buyers will prefer a property with a 77 year lease because it's cheaper (and they can save up to buy a lease extension later).

Other buyers will prefer to pay more for a property with an extended lease - to save all the hassle of extending a lease later.

Ritchie_T

divadee wrote: »

I know exactly where that is. Used to live in xchurch.

I would say as above with the current lease it's cash buyers only. And for that you would probably get 160k. . That's what I have seen 2 beds with short leases in decent ish areas go for.

At the moment in the area a lot of flats are being reduced in price. I think personally they were over priced before and buyers are being more cautious and sellers who actually have to sell are being more realistic.

A lease extension would be quite expensive as you have the marriage value to add in now it's below 80 years. So you will need to do your sums. If you just want rid quickly you would need to find a cash buyer.

Decent 'ish', Iford is the Mayfair of Bournemouth! You're exactly right, it's a decent ish area, and I'm hoping my flat will sell fast. I'm going to cut a deal with the freeholder to extend the lease back to 90 years for a fair price hopefully. That way it'll negate the marriage value as I don't think that they're that bothered as they are selling up too. I just need to get it done quickly.