Lease extension question

ewicc

even though through the informal route the lease would be shorter by about 50 years.. at what point is going through the formal route become more sensible?

eddddy

ewicc said:

even though through the informal route the lease would be shorter by about 50 years.. at what point is going through the formal route become more sensible?

No - that's not what I meant. What I meant was...

• If the lease extension calculators say it would cost you about £10k for a 90 year lease extension with zero ground rent...
• Then you can make an informal offer to your freeholder of up to £11k or £11.5k for a 90 year lease extension with zero ground rent.

That's how you might approach a negotiation with a private freeholder, but looking back, I see that your freeholder is a Housing Association. I suspect that they would want to follow their strict procedures, rather than enter into negotiation with you.

If the Housing Association uses a 'fair' calculation, adding 42 years to a lease with £100 ground rent should be much cheaper than adding 90 years to a lease with zero ground rent.

The calculation used for a formal/statutory lease extension has been set in law by parliament.  But the  Housing Association may use a different calculation for their informal extensions - which is less fair on you. You could ask them for details of the calculation they will use, but it's likely to be very complex.

ewicc

Great thank you.. I will contact them to start getting the ball rolling on the informal route in the first instance.
Hopefully the survey they get done for the informal route will still be valid for the formal route if I change to that depending on figure I get for the informal option.

ewicc

Update- they are veery slow to reply and deal with, it took them several months to reply to my request to start the process alone. Having paid for the survey to be done via their surveyor. They have come back with an offer of £4000 to extend my lease to 125 (from 82.8 years) years with ground rent of £100 per year which doubles every 25 years going down the informal route.
Included in the survey was the formal figure of £7390 which adds 90 years to my current lease. They valued my place a bit high at £425000.
Which route would you guys go down/recommend? I am guessing with both the informal and formal route I need to pay/instruct solicitors for myself and pay for their solicitors/legal fees too?

Another question I have is if I opt to go down the formal route, how much difference would £25000 reduction in the value of the property for example make to the formal figure of £7390 be, enough to warrant the additional cost of getting another survey done (£500~) or just stick with their figures?

Thanks in advance.