Do I need a lease extension?

hg117

Hi, I wonder if anyone can advise me on leases. (Might be dumb question but I'm a first-time buyer so there are no dumb Qs)

I want to make an offer on a flat that I have seen (£159,000, but asking price is £160,000). The flat has 88 years remaining on the lease. This is a first-time buy but I see myself living there perhaps up to 10 years.

I am a bit anxious about the lease situation as I understand that it becomes very expensive to renew at or under 80 years. I don't want to end up in a situation where I have to pay thousands to extend it a few years after I purchase the place, or find that I can't sell it easily when I do decide to move.

Ideally, I would like to ask the sellers to include lease extension in my offer, but I know that there is competition for the property and offers have already been made at 159/160.

Am I right to be cautious or is asking for lease extension with 88 years remaining a bit over-cautious? Can you negotiate this into your offer? Or is it best to make an offer, be accepted, find out the cost of lease extension from the solicitors and then ask the seller to extend the lease?

Many thanks!

eddddy

It's the freeholder that grants a lease extension (you're buying from the leaseholder).

If you want, you can ask the leaseholder to ask the freeholder if they will grant a lease extension, what the terms would be, and how much they would charge.

You could then arrange to buy the current lease from the leaseholder, and a lease extension form the freeholder.

But you'd need advice on this - a bad lease extension can be poor value and might even make a property unmortgageable.

Alternatively, you can do a statutory lease extension.

Here's some more info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

Officer_Dibble

If you sell in 10 years, a 78 year lease shouldn't be a major drag on price or willingness to buy. We sold our last flat with a 63 year lease without it being an issue - though that was central London where there are lots of short leases and cash buyers. If I was selling a flat with an 88 year lease and a potential buyer started asking me to either extend or set the lease extention ball rolling, I think I'd just to sell to someone who was less high maintenance. More important is to check that there are no unreasonable ground rent increases in the lease - such as the Taylor Wimpey doubling every 10 years. This would increase the cost of lease extention massively.

Tom99

[FONT=Verdana, sans-serif]Work out the likely cost of a lease extension using one of the several available calculators.[/FONT]

[FONT=Verdana, sans-serif]https://www.lease-advice.org/calculator/[/FONT]

[FONT=Verdana, sans-serif]https://www.freeholdcalculator.com/leasehold_extension.php[/FONT]

[FONT=Verdana, sans-serif]Remember to add in both side legal cost which could well be £2,500 - £4,000[/FONT]

[FONT=Verdana, sans-serif]Then you can either wait 2 years to serve the Section 42 lease extension notice yourself, or if the seller has owned the flat for at lease 2 yrs, you can ask them to serve the S42 now, after exchange of contracts and assign the notice to you. You then take forward and pay for the lease extension.[/FONT]

[FONT=Verdana, sans-serif]The other alternative of trying to get the seller to extend the lease before they sell to you or even just finding out how much the freeholder is going to quote will likely see them move on to a less demanding buyer.[/FONT]
[FONT=Verdana, sans-serif]
[/FONT][FONT=Verdana, sans-serif]Whatever you do, check the ground rent and ground rent review situation now, if possible get hold of a copy of the lease.[/FONT]

Hipperty

Is it possible to get a copy of the lease other than through the vendor or their estate agent?

Tom99

Hipperty wrote: »

Is it possible to get a copy of the lease other than through the vendor or their estate agent?

The Land Reg sometimes hold a copy that can be requested via post for about £10/£12 I think. You cannot download a copy of the lease like you can the title/title plan