Lease

wheelz

I am planning on selling my flat next year in preparation for a move abroad to be closer to my parents. We can't be sure on the timing when we are going to move as it depends on a number of factors (finding work, elderly parents that might need care sooner than expected). There is a lease on the flat that likely needs to be extended and I thought with a year to go it would be good to do that in advance. Would that be what most people do extend it beforehand as I have also heard that sometimes seller and buyer share the cost of extending it. I would have thought this slows down the selling process. What would be the a minimum of years remaining that would still be ok for selling without extending the lease? Do you just accept the fee that the managing agent comes back with or should you negotiate the price? I have heard of people in my block going through the courts(?)/tribunal to lower the price, this is years ago and it worries me. Is there anything else that I need to consider in connection with the lease? I used to live in my flat but have tenants now as I have moved out.

eddddy

If you want to extend the lease, the safest route is usually a Statutory Lease Extension.

It typically takes between 6 and 18 months, depending on how hard the freeholder fights. You should allow for about £4k in fees in addition to the premium price.

If the current lease is well over 80 years, you may not recover the cost of the lease extension in the asking price - ask some local EAs' opinions.

For example, you may find it easier to sell a flat for £250k with a 90 year lease (i.e. unextended), than selling the same flat for £260k with a 180 year lease (i.e. extended).

Rightly or wrongly, people might see two similar flats on Rightmove one at £250k and the other at £260k - and tend to ignore the £260k one, especially if their max budget is £250k.


Even if they appreciate the difference in lease length, some buyers may prefer to spend £250k now, and then take 5 years to save up the £10k for the extension.

But other buyers may think differently.

Mr_da

All I can say is that I'm selling a flat with a 66 year lease and it lowers the price, but at same time when putting it on the market I was thinking that selling it for five plus thousand (cost of extending) would put people off initially coming through the door due to what neighbouring properties have gone for.
You will probably get interest off investment buyers with the short lease, but they offer you peanuts.

wheelz

Thanks very much. I have also found the guidance on the Moneysavingexpert site and that has some useful info. I thought you had to do this yourself but the guidance suggests you get a solicitor that takes some of my worries away. 6-18 months that's a long time, Im glad I'm trying to sort it out well in advance of starting the selling process. http://www.moneysavingexpert.com/mortgages/extend-your-lease