HELP? Need advise with what to do next regarding lease!!

Guest101

Demiii wrote: »

Because it could possibly be cheaper, dealing with it now, rather than 2 years time. Our solicitor has said along the lines of, you will basically pay a load more when the lease drops to 68 years.

So we panicked, as we thinking huge sums.

Regarding if the lease extension comes to X amount, we have the funds to do so. As we have a rough figure of what it could cost.

I sound so stupid and clueless, sorry.

It could be cheaper, it will be cheaper in fact. But the point is how much cheaper and how that compares to you investing the funds for two years.

Guest101

Jox wrote: »

There was 73 years left on the lease when I bought my one bed flat in 2005 and I didn't have a clue about leases....10 years later I extended the lease to 125 years (cost £15k + £3k legal fees) and I've just noticed the ground rent which was £75 a year has now been increased to £150 a year and will double after 30 years - stupid of me not to pick up on this (I had just had a baby which is my reason for foggy-headedness!) So check the ground rent as well if you extend the lease!

To be fair that's still less the £3 per week, which could be a right bargain!!

Demiii

Thanks for replying.
Well the ground yet at the moment is £90 for the 2 bed flat.

Is it as bad as it all sounds buying a flat with a short lease. The price you paid plus legal fees, is an amount, providing every stays the same, we could possibly save in 3 years... Making the lease then 68 years.

AdrianC

Guest101 wrote: »

The lease extension isn't just a number pulled out of thin air,

It can be...

OP - there are two ways to extend your lease.

First is to use the statutory extension route.
http://www.lease-advice.org/calculator/
The drawback to that is that you need to have owned the property for two years.

Second is to negotiate directly with the freeholder, who CAN just pluck a figure from the air.
The other big drawback to this route is that it CAN look cheaper, until you find this happening...

Jox wrote: »

There was 73 years left on the lease when I bought my one bed flat in 2005 and I didn't have a clue about leases....10 years later I extended the lease to 125 years (cost £15k + £3k legal fees) and I've just noticed the ground rent which was £75 a year has now been increased to £150 a year and will double after 30 years

Guest101

AdrianC wrote: »

It can be...

OP - there are two ways to extend your lease.

First is to use the statutory extension route.
http://www.lease-advice.org/calculator/
The drawback to that is that you need to have owned the property for two years.

Second is to negotiate directly with the freeholder, who CAN just pluck a figure from the air.
The other big drawback to this route is that it CAN look cheaper, until you find this happening...

indeed. I was referring to the statutory route, as the OP was worried regarding the cost in 2 years time.

Cakeguts

You need to do some research on prices now. The flat with a 71 year lease should be cheaper than a similar flat in the same area with a much longer lease. Is it? How will it compare to the price of a flat bought now with a longer lease when you have paid to have the lease extended? Doing this research will tell you whether this is going to be a more expensive option than looking for a different property.

Demiii

In the same area, which similar flats with a long lease, they're around 10k - 15k dearer... So is probably the cost of a extended lease, but what I've read from peoples experience.

ognum

Oh dear, I would not exchange contracts until you have found out the price of a lease extension.

Unless the flat is a real bargain I would not choose a flat with a short lease. Dealing with freeholders is often protracted and time consuming. You will head to negotiate the 'marriage value of the lost years' and the lease upgrade will become more each year you do not do it.

You are young and tech savvy, Google is your friend. Start doing some research on lease extensions, the cost including a lawyer to negotiate your lease and the freeholder will without doubt have you paying their costs. Google 'marriage value'. Always plan to negotiate your ground rent to zero, or pepper corn, do not get sucked into an escalating ground rent for a cheaper lease extension.

As a first time buyer you have been badly advised by your solicitor, I don't believe this is a flat I would advise my kids to buy if they were first timers. Always look for 999 year leases or share of the freehold.

deFoix

ognum wrote: »

Unless the flat is a real bargain I would not choose a flat with a short lease.

I agree. I'd wouldn't exchange unless I was absolutely sure that I was getting a good deal factoring the cost of lease extension and the hassle and legal costs of negotiating one. One option is to ask the buyer for a further discount off the price.

You should get expert advise on the lease extension before you exchange if that's what you want to do.

I personally think its criminal that estate agents don't CLEARLY show the lease expiry and associated lease service charges and ground rents in the property listing right from the outset - this information is fundamental to the price!

marksoton

Demiii wrote: »

In the same area, which similar flats with a long lease, they're around 10k - 15k dearer... So is probably the cost of a extended lease, but what I've read from peoples experience.

You also have to factor in the cost of time and aggro.