Shared Ownership: Staircasing vs Lease running low

Trung_UK

Hi, I'm so confused.

I think I have 83 years left on my leasehold on a shared ownership property but my final goal is to purchase the property outright.

If I let my lease run lower than 80 years how does that effect the costs of buying outright with freehold (and staircasing on leasehold).

I understand in normal circumstances (non-shared ownership) the lower the lease years, the lower the valuation of the property. Once you passed below 80 years you are also subject to the marriage rule/fee if you want to renew your lease in order to sell for a higher fee. But as I have no intention of selling, does this affect me?

1) Does this mean that the longer I leave the lease, the cheaper it is for me to buy the property?

I own 40% and bought when value was £295k in 2014, the property is probably worth around £385-£400k now. So surely as long as the loss of valuation does not mean the property is devalued below what I initially bought the property for, it doesn't affect me financially?

2) Would I need to renew the lease in order to buy outright? Surely it's not in my favor?

3) Am I missing something? What is my best option?

4) Also how does a low lease affect staircasing (not buying outright)?

Thanks for your advise!

Tom99

[FONT=Verdana, sans-serif]You normally cannot extend your lease using the statutory process until you have staircased to 100%.

[/FONT] [FONT=Verdana, sans-serif]Assuming its a flat and not a house, the value of the lease will drop as it goes through 80 years remaining because extending the lease will cost more as 50% of the marriage value will have to be paid.

[/FONT] [FONT=Verdana, sans-serif]If you allow the lease to drop to say 79 years, your staircaseing cost of the 60% you don't yet own may be less, but your cost of extending the lease will be more and that will be on 100% of the lease value not just the 60%.

[/FONT] [FONT=Verdana, sans-serif]So you are likely to have to pay more to get an extended lease on 100% if you leave it until the lease is shorter.[/FONT]

ThePants999

But if you genuinely expect never to sell, there's no reason to extend the lease unless you're worried about the inheritance you'll leave someone.

Trung_UK

Thanks for the replies.

Sorry I forgot to mention that the property is a house. I am able to buy the freehold once I reach 100%.

How does this change the answer?

Can I purposely let my lease run low so it brings the property price down to help me buy the remainder 60% of the house (or/and buy more shares/staircase) at a cheaper more affordable price?

Has anyone heard of a lease agreement stipulating you must extend the lease before you buy the property outright?

And yes you are right, extending the lease would have to be done via the non-statutory way which I've read the HA would allow but at a cost.

Really appreciate any advice.