How long do I wait before I pull out of a sale?

Jonboy_1984

Extending the lease on a (formal section 42) statutory basis reduces the ground rent to peppercorn immediately.
Part of the premium calculation is compensating the freeholder for this. There are calculators on the lease advise service that give a good indication of the cost (take into account the two year wait before you can take this route).

An (informal) non statutory extension is on whatever terms you negiotiate with the freeholder (and your lender approves of!) and can be any such term such as ground rent continuing or at X rate with Y increase. 

Also bear in mind that as the lease drops below 80 years marriage value kicks in and the flat likely becomes much harder to sell without a lease extension (or more realistically 85 years with a savy  buyer who understands this is coming up). 

BuyingSolo

Jonboy_1984 said:

Extending the lease on a (formal section 42) statutory basis reduces the ground rent to peppercorn immediately.
Part of the premium calculation is compensating the freeholder for this. There are calculators on the lease advise service that give a good indication of the cost (take into account the two year wait before you can take this route).

An (informal) non statutory extension is on whatever terms you negiotiate with the freeholder (and your lender approves of!) and can be any such term such as ground rent continuing or at X rate with Y increase. 

Also bear in mind that as the lease drops below 80 years marriage value kicks in and the flat likely becomes much harder to sell without a lease extension (or more realistically 85 years with a savy  buyer who understands this is coming up). 

Thanks. That's good to know - strongly suspect informal lease extension is what the management company will want (so that they cnan keep charging ground rent). Lease is long, so don't need to worry about extending it from that perspective. 

badger09

Family friend offer accepted on leasehold flat 24 March. She’s a cash buyer, not FTB. Vendor has moved, by choice, into a care home. Minor structural issue dealt with by responsive management company. Both motivated but no indication of exchange yet. 

Patience needed. 

EssexHebridean

We accepted an offer on our LH flat mid May, and immediately offered on the place we were wanting to buy, having that offer accepted the following day as I recall. We're now creeping slowly towards a likely exchange once all relevant parties are back from their various holidays sometime next week - although I certainly wouldn't say it will "definitely" happen then, there is nothing in particular holding things up now. Frustrating as it is, anything with a leasehold does take time - it took out local authority freeholder well over 5 weeks to get the sales pack back to our solicitor for example, after they moved the goalposts on timescales after the pack had been ordered. Sigh. take a breath, make a cuppa, have faith that it will happen. (And bear in mind in the future when you come to sell, being a first time seller is every bit as much "unknown territory" as being a FTB is!)

Don't step away from a property you can see as "home" due to impatience, and don't even consider threatening that you might unless you are prepared to have your bluff called. 

BuyingSolo

Thanks again all. You're absolutely right about threatening to pull out - only threaten to pull out if you mean it! I think I am going to wait until I get close to my mortgage offer expiring and then threaten as if my mortage offer falls through, I will have to pull out whether I want to or not.

eddddy

BuyingSolo said:

That's good to know - strongly suspect informal lease extension is what the management company will want (so that they cnan keep charging ground rent). Lease is long, so don't need to worry about extending it from that perspective. 

Just to clarify - it's not really a case of what the management company want.

Almost all flats are eligible for a statutory lease extension - the management company (and freeholder etc) can't stop you getting one. And then the ground rent will reduce to zero straight away.



FWIW, the ground rent goes to the landlord (who is usually the freeholder), not the management company.

Although occasionally the management company is the landlord/freeholder as well.