Leasehold extension or freehold purchase of house with 47years remaining on lease

mawales22

Hi All.

My cousin has a 4 bedroom detached house in Wales and has just asked me to assist him in extending his lease which only has 47 years remaining, or to explore purchasing the freehold. The property is valued at £200,000. He pays ground rent of £16 every 6 months.

Before I reach out to the landowner, does anyone have any suggestions on how to extend the lease cheaply as possible? Will we need a solicitor or can we do it directly with the landowner?

Also, how can I find out an approximate guideline price on the premium to extend the lease or purchase the freehold before reaching out to the landowner. Thank you.

Appreciate any help.

Thanks

Caz3121

although an older article, this is probably worth a read https://www.moneysavingexpert.com/mortgages/buy-freehold-right-to-manage/

eddddy

A statutory lease extension for a house is free - it adds 50 years to the lease, but the ground rent would be increased to a 'modern ground rent' at the end of the 47 years. A modern ground rent could be £1000+ per year. 
See: https://www.lease-advice.org/faq/i-cant-afford-to-buy-the-freehold-of-my-house-can-i-extend-my-lease-instead/

TBH, I don't know if the house would be mortgageable with that type of lease extension. And it might increase the cost of buying the freehold later.

Here's a calculator that claims to give a rough estimate of the cost of buying a freehold - you need to select 'Enfranchisement' (not lease extension), and it seems to want the value of the house with it's 47 year lease...
https://lbb.org.uk/calculator/

(When you say the house is valued at £200k - is that with a 47 year lease or with a long lease?)

They'll be a chunk of legal fees etc to pay as well.

If your cousin doesn't have the cash available, you might be able to do a deal like this with the freeholder...
Your cousin sells the house as a freehold house - and part of the sale proceeds goes to the freeholder, and part goes to your cousin.

eddddy

Caz3121 said:

although an older article, this is probably worth a read https://www.moneysavingexpert.com/mortgages/buy-freehold-right-to-manage/

Unfortunately that article is about flats - the OP is asking about a house.

So the OP should completely ignore that article - except maybe for this bit:

• What if I own a leasehold house?
  
  In areas such as North East England there are still leasehold houses, particularly those built in the '60s and '70s. Freehold houses come under different law. The process to buy your freehold is similar, but the law's more complex, so valuations take more time.
  Leasehold houses are rare and the legislation is tricky, so seek advice from a solicitor with experience in the area. See the Leasehold Advisory Service's full guide to buying your house's freehold.