Leasehold Advice

Jaffabfc

Hi All,

I need some advice on a leasehold flat that my brother currently owns.

He bought the flat off myself in 2016 for £60k, with a 58 year lease remaining. He is now able to sort the lease out and extend it, we have got a solicitor involved who is telling us it would be in the region of £8-10k which i find ridiculous.

Heres the facts:

Bought for 60k (mortgage)
£30 per annum ground rent
I had a quote before selling of £4,750 to increase to 80 years and ground rent of £250 or £5,660 with ground rent of £300 to increase to 99 years.

With in 2 years they are now saying this could have basically doubled?

The flat and the other flats in the area are valued between £50k and £75k is this really a reasonable price or is this something we need to argue and argue?

What price should i really be looking at? most websites are not really making sense and saying this is for London based leaseholds.

Thanks

eddddy

A couple of the online lease extension calculators are suggesting £7k to £11k for a statutory lease extension. I guess that's what your solicitor is talking about.

Try....
https://www.lease-advice.org/calculator/
http://www.myleasehold.co.uk/lease-extension-calculator

That adds 90 years to the lease and reduces the ground rent to zero.

The terms you were offered 2 years ago are much worse than that - which is why they were cheap (and probably best avoided)

Jaffabfc

It wouldnt matter how bad they were to be honest as they dont do anything.

they dont do any maintenance work on the land all they do is own it.

the cheaper the better but i think 16% of what the house is worth for an increase on lease is beyond a joke.

he is wanting to sell the flat straight after the lease is finalised and extended.

eddddy

I think you might have misunderstood.

What I'm saying is this is a very bad deal...

Jaffabfc wrote: »

I had a quote before selling of £4,750 to increase to 80 years and ground rent of £250

If your brother takes the above deal, he might have to sell the flat cheaply - because an 80 year lease isn't very good.


If your brother wants to sell the flat immediately, this deal might be ok (but it is still not good) - as long the ground rent is fixed at £300 for the whole lease:

Jaffabfc wrote: »

or £5,660 with ground rent of £300 to increase to 99 years.

I guess those deals were offered by the freeholder. If you want to take up one of those deals you need to talk to your freeholder first, not your solicitor. (But the freeholder might have increased the prices now.)

eddddy

... actually, I just had another thought...

Jaffabfc wrote: »

or £5,660 with ground rent of £300 to increase to 99 years.

£300 ground rent on a £70,000 flat is about 0.4%.

Mortgage companies might not like that. It's a bit risky.

Unless the freeholder will offer you a better deal - maybe it's best to go for a statutory lease extension (like your solicitor seems to be suggesting).