Council charging extortionate amount for leasehold renewal

Marleyuk

Hi,

My dad  recently found out that his house that he’s lived at since 1987 only has 57 years left on the lease, owned by the council.

Through further investigation it appears that the property originally had a 99 year lease, and for what ever reason, this hadn’t been clear to him.

He has contacted the council to understand the cost to buy the lease, and following a recent survey he been informed that the cost to buy the lease will be £29,000, with the renewal around £20,000. 

As his house is only worth £140,000, this feels disproportionately high.

Having spoken to a few of his neighbours, they all seem to be in the same position. Whilst I appreciate it was ultimately their responsibility to have checked this, they have collectively been misled.

Does anyone have any experience of being in a similar situation?

We’re not even sure who would specialise in this issue for legal advice.

Any help is greatly appreciated!

Thanks,
Ian

eddddy

Just to get the jargon right - it sounds like he owns a leasehold house (with 57 years left on the lease) and he wants to buy the freehold. The legal term for this is 'freehold enfranchisement'.

Was it the council who arranged the £29,000 valuation for the freehold? To be honest, it sounds like the right ballpark figure.

But you can arrange your own valuation if you want, to get a 'second opinion' - but that valuation might cost £300 to £500.

If you decide to proceed with buying the freehold, they'll probably be a chunk of legal fees to pay as well - maybe £2000 to £3000.


If your dad decided to sell the flat instead, a buyer wouldn't be able to get a mortgage on a house with a 57 year lease. So he'd probably have to sell it quite cheaply to an investor with cash. (Who would probably be looking to make a profit - for example, by buying the house for £90,000, paying £29,000 for the freehold - and ending up with a house worth £140,000.)


LEASE is a government backed organisation, they provide advice on this kind of stuff. Here are a couple of articles about buying the freehold of your house:

• https://www.lease-advice.org/faq/i-own-a-leasehold-house-how-do-i-buy-the-freehold/
• https://www.lease-advice.org/advice-guide/houses-qualification-valuation/

You can also book a free phone call with LEASE, to ask more about it (select 'Book a Leasehold Call')....

• https://clients.lease-advice.org/#/

You'll eventually need a specialist solicitor to deal with this, if you google something like house freehold enfranchisement you should find a few. Many of them will have an initial brief chat with you for free.



If your dad feels he didn't understand what he was buying at the outset, some people suggest that you should complain to your solicitor who helped you with the purchase, because they didn't explain clearly. But if that was in 1987, I doubt that's an option. And I'm not sure you'd get a positive result anyway.

macman

You are aware that the price for an extension goes up each year as the remaining lease shortens?