Advice on lease extension situation please!

niktheguru

Hi guys hope you can help me.

I own a flat that has 92yrs left of a 125yr lease. I'm looking to getting a lease extension of the standard additional 90 years. I want to do it now because i'd rather get it out of the way whilst it is cheaper. (than wait till when its nearer 80yrs)

My question is would you suggest i go the informal or the formal route?

For the informal route i've been told the costs are:

Freeholder administration fee: £167 plus VAT
Valuation fee: £300 – £375 plus VAT
Freeholder solicitors costs for a standard lease extension: £450 – £550 plus VAT

+ whatever the actual lease extension cost is.

If I go the formal route then i would pay the above costs as well as costs incurred for my own solicitor which would be about £1500 to £2000 as well as having my own valuation which would be approx £300-600

Having put the figures in one of these lease extension calculators it says the extension should cost between £3000 and £10000.

I have received conflicting advice from lease extension lawyers regarding which route to take. some say go informal, others say formal.

If I had a short lease i'd definitely go formal as the lease extension costs would be much higher figures so the potential saving is high.....however given my situation with 92yrs still left on mine, what would you all suggest? By going formal would I save money? or should I chance informal and see what I am quoted?

Thanks for your help.

Tom99

[FONT=Verdana, sans-serif]The informal admin/valuation fee is not actually very high so maybe worth a risk.[/FONT]
[FONT=Verdana, sans-serif]You could try making an informal approach with some conditions before your fee is taken eg[/FONT]

• [FONT=Verdana, sans-serif]No ground rent.[/FONT]
• [FONT=Verdana, sans-serif]The minimum term you want.[/FONT]
• [FONT=Verdana, sans-serif]That your valuation fee will count towards the statutory valuation fee if you later have to go that route.[/FONT]

[FONT=Verdana, sans-serif]The freeholder may not agree with the above but it may be worth a try.[/FONT]

eddddy

niktheguru wrote: »

For the informal route i've been told the costs are:

Freeholder administration fee: £167 plus VAT
Valuation fee: £300 – £375 plus VAT
Freeholder solicitors costs for a standard lease extension: £450 – £550 plus VAT

+ whatever the actual lease extension cost is.

If I go the formal route then i would pay the above costs as well as costs incurred for my own solicitor which would be about £1500 to £2000 as well as having my own valuation which would be approx £300-600

All the freeholder's costs (which you will have to pay) are likely to be higher, if you take the formal/statutory route.

The choice between informal/statutory really boils down to what pice you can negotiate for the informal route.

bouicca21

It's not just the price of the extension but the ground rent provisions. Formal gets zero ground rent, informal gets a negotiation.

[Deleted User]

You could also wait until the government proposals are introduced which will / should significantly reduce the costs to Leaseholders of extending a lease or purchasing their Freehold. They are also looking into marriage values as part of the same deal.


I am in the same situation and will wait to see what happens, September I think is when we should know.

divadee

BBH123 wrote: »

You could also wait until the government proposals are introduced which will / should significantly reduce the costs to Leaseholders of extending a lease or purchasing their Freehold. They are also looking into marriage values as part of the same deal.


I am in the same situation and will wait to see what happens, September I think is when we should know.

This i believe (and may be wrong) is mainly for leasehold houses and not leasehold flats.

Skippy13

divadee wrote: »

This i believe (and may be wrong) is mainly for leasehold houses and not leasehold flats.

I can't help thinking it might ripple down to flats as well. At least I hope so as I've got a flat with a short lease!

[Deleted User]

Its both but houses may come first

Tom99

Skippy13 wrote: »

I can't help thinking it might ripple down to flats as well. At least I hope so as I've got a flat with a short lease!

[FONT=Verdana, sans-serif]I don't think any new law is going to make it cheaper for existing flat owners to extend their lease.[/FONT]
[FONT=Verdana, sans-serif]The flat owner gets a pretty good deal at the moment. Above 80 years the tenant get to keep all the marriage value and below 80 years they get 50%. Effectively the tenant can already force a compulsory purchase order on the landlords interest.[/FONT]
[FONT=Verdana, sans-serif]A new law might have effect on newly granted leases though.[/FONT]

Skippy13

Tom99 wrote: »

[FONT=Verdana, sans-serif]I don't think any new law is going to make it cheaper for existing flat owners to extend their lease.[/FONT]
[FONT=Verdana, sans-serif]The flat owner gets a pretty good deal at the moment. Above 80 years the tenant get to keep all the marriage value and below 80 years they get 50%. Effectively the tenant can already force a compulsory purchase order on the landlords interest.[/FONT]
[FONT=Verdana, sans-serif]A new law might have effect on newly granted leases though.[/FONT]

I don't call £32000 a good deal when the freeholder does absolutely nothing for his money!

Our lease was below 80 years when we bought and we didn't realise the implications and it wasn't mentioned by the mortgage company or solicitor. We looked into extending this year and started informal proceedings but pulled out for various reasons. We're going to wait 2 years as I have just been added to the deeds and, depending on our financial situation, look to going down the statutory route for a much better deal than the freeholder was offering.

[Deleted User]

Tom99 wrote: »

[FONT=Verdana, sans-serif]I don't think any new law is going to make it cheaper for existing flat owners to extend their lease.[/FONT]
[FONT=Verdana, sans-serif]The flat owner gets a pretty good deal at the moment. Above 80 years the tenant get to keep all the marriage value and below 80 years they get 50%. Effectively the tenant can already force a compulsory purchase order on the landlords interest.[/FONT]
[FONT=Verdana, sans-serif]A new law might have effect on newly granted leases though.[/FONT]

What rubbish, you should be able to buy your home at point of sale, not be held to ransom by some unknown freeholder exploiting as much money as possible from you for as long as possible. Commonhold should be the status of all home owners otherwise you and your family down the generations are no more than renting tenants.