FTB - Advice on leasehold property lease extensions

desktopdiddies

Hi

I'm a first time buyer trying to move from renting to ownership before the end of the year ideally, overdue from pre-covid times.

The only stumbling block i have is some of the properties i have seen that fall into my budget have circa 90 years left on the lease.

My understanding is that come 80 years remaining on the lease the proverty value plummets so I don't know/understand how to plan for that:

- should those properties be avoided

- are lease extensions hundreds or thousands of pounds to complete

- how can i estimate the costs involved in extending a lease and by buying a leasehold property, are there scenarios whereby the leasholder can refuse/reject an extension perhaps.

I have asked some estate agents and my bank about this but neither have given me any helpful guidance, so any advice from here would be much appreciated.

Thanks

Caz3121

there is an article on short leases here https://www.moneysavingexpert.com/mortgages/extend-your-lease/

AlexMac

There used to be a chapter on this here on this, the MSE website, with a cost calculator, but I can't find it now?

So maybe start with https://www.lease-advice.org/calculator/

I can't comment from personal experience, but I don't think its a major problem at 90 years?

NameUnavailable

90 years won't be a problem now, but if you live there for say 9 years then you are going to find it hard to sell again unless you extend the lease first.

That is assuming there are no ground rent, EWS1 or PAS9980 hurdles to overcome!

My advice OP is (assuming you can't afford a freehold house) to look for a flat with a long lease (900 + years) and peppercorn, or low and fixed, ground rent. At least that way you are eliminating two potential problems for the future. Why buy someone else's nightmare?

bouicca21

90 years isn’t a problem.  Excessive ground rent and high service charges probably are, as are high rise ex council blocks and buildings with cladding.

These are things you need to check out before spending money on conveyancing and surveys.  Don’t believe what an EA tells you about the length and terms of the lease, ask to see it or download from Land Registry. Find out what the service charge covers. Lifts, gyms and concierge services are great - but expensive.  A friend has all three and pays a mouth watering £4,000 a year.  I have none of them and pay circa £1200-1300.  Ground rents that double every 10-15 years will make it difficult to get a mortgage.  Ground rents that are (or will become) over £1,000 a year in London or £250 elsewhere are a problem.  

Ask your mortgage lender about their policy for lending on ex council blocks. When I was buying I was told only 4 story brick built blocks were acceptable, but that may have changed and of course different lenders might have different policies.