Short lease extension enquiry

AnnieSam

Many Many years ago, I bought my property unfortunately with the lease already short. I now have 51 years left remaining and my Freeholders said it will cost in the region of £42,000 to extend, which is a very high amount and a high amount to get hold off too. I already know that by renewing the lease this will increase the property value, (if you actually have £42,000 sitting around), in this current market, is it advisable to sell without extending the lease? Would appreciate your comments in relation to this or would I be better off trying to sell it at an auction?
MANY THANKS

da_rule

A lease this short would almost inevitably have to be sold via auction as it is pretty much unmortgageable.

Whilst the landlord has quoted £42,000 it might be worth spending a couple of hundred and getting a surveyor to give you a proper estimate of how much a lease extension would cost if you went down the statutory extension route.

Tom99

Don't take your freeholder's word for it, they are obviously going to quote you a high price.
What will an extended 142yr lease at £0 ground rent be worth?
According to this calculator if, after the lease extension your flat was worth £200,000 then the premium you would pay would be approx c£33,000 plus both sides fees.
If you cannot raise that money yourself then the other option is to sell the current lease but offer to serve a Section 42 Notice to extend the lease after exchange of contracts.
You then assign the Section 42 Notice to the purchaser who is responsible for taking the lease extension forward and paying all costs.
But that second option will still not make your flat mortgageable so the market will be very limited.

https://www.freeholdcalculator.com/leasehold_extension.php

seven-day-weekend

I second getting a reputable professional to negotiate the price. We paid a few hundred for a lease extension specialist surveyor to do this for our son's lease extension, he got a much better deal than we would ever have got. It cost £12k to extend the lease up to 125 years. This added £30k to the value of the flat and it is now worth around £85k -£95k.

Obviously if your flat is worth more than that, then the lease extension will cost more, but I would totally advise doing it if you can.