Lease Extension Calculation

strawberries1

I'll be grateful for your advice please.

My offer of £270k accepted for leasehold with 75yrs remaining. However, legal report says 72yrs remaining.

Ground rent is £30, expires 22.6.2091

By how much shall I revise my offer?

About how much will it cost me to extend this lease? I'd estimated £15000.

I would've been happy to buy it at £285,000 maximum so my offer of £270,000 seemed reasonable giving the allowance of £15,000 to extend.

eddddy

You can get an indication of cost of a statutory lease extension using the online calculators. For example:

https://www.lease-advice.org/calculator/
http://www.myleasehold.co.uk/lease-extension-calculator
http://www.fridaysmove.com/lease-extension-calculator/calculator-page-1

The legal/valuation fees are likely to be about £3k to £4k on top.

You'd need to get the seller to start the Statutory Lease Extension process by serving a section 42 notice.

Realistically, you'll need to get a valuation from a valuer before serving the section 42 notice, so that will give you a better indication of what you'll have to pay for an extension.

strawberries1 wrote: »

I would've been happy to buy it at £285,000 maximum so my offer of £270,000 seemed reasonable giving the allowance of £15,000 to extend.

If it were me, I'd be looking for a bigger 'discount' than that - given the cost, risk, uncertainty and hassle of a lease extension.

But I guess it depends how 'hot' the local market conditions are.

Tom99

[FONT=Verdana, sans-serif]The difference between a 75 yr lease and a 72 yrs lease is about £3-£4k so why not drop your offer by that.[/FONT]
[FONT=Verdana, sans-serif]However as said above you do not seem to be taking enough discount.[/FONT]
[FONT=Verdana, sans-serif]If £285k is the value of the extended lease and the cost is say £18k-£20k plus say £4k fees you need to take off about £25k just to break even, so an offer of £260k or less.[/FONT]

strawberries1

Thank you!
I revised my offer to £260k, accepted! Time for an MSE donation! You guys are awesome!

The issue now is my lender. MA unavailable. I've rang 7 times between yesterday and today. Everyone says no extension or MA has to speak to me in order to revise offer. (Keeping LTV so rate remains the same).

Finally her manager has rang me back. I've uploaded up to date docs and he's contacting underwritter to dealt with application. Fingers crossed a revised offer will be sent to conveyancers shortly as mortgage expires on Friday. Mortgage fee was about £999!