Leasehold Maisonette - Nearing 80 years and advice needed

LDHarv

Hello,

I’m looking for some advice on my maisonette which I purchased back in July 2016 with my wife for £258,000 – 2 bedrooms, downstairs, garden, kitchen, living room and bathroom.

When we purchased the property, we had approx. 88 years left on the leasehold. Property in my area at the time was expensive and we getting on the ladder was tricky, so you often had to bid over the asking price. I’m now exploring options, as we do need to move to a bigger place at some point and I’m thinking of selling next year. The leasehold has currently 80 years and 6 months left (140 years from 25th March 1964), and I’m not sure what to do.

 

I’m aware when we purchased it that if we let it go under 80 years it would make it hard to sell (mortgage lenders wouldn’t lend for people purchasing) and it would cost more for us to extend the lease. I haven’t got the money just sitting to extend, based on the estimates I’ve seen online, and would need to borrow to pay for the lease extension. I held fire for a number of years, mainly as it wasn’t something to worry about, and as there was a lot of conversations about government legislation going through which would make the process easier and less expensive. From what I’ve read recently, this still hasn’t progressed any further and now we’re close to the 80 years coming up.

 

So my simple question is, what should I do? Is it still hard to sell properties with leases under 80 years? Is it still vastly more expensive to extend the lease when it goes under 80 years? If I’m looking to sell, is there anything I can do to make the process easier?

 

Any advice very much welcome.

 

Thanks

eddddy

LDHarv said:

Is it still hard to sell properties with leases under 80 years? Is it still vastly more expensive to extend the lease when it goes under 80 years? If I’m looking to sell, is there anything I can do to make the process easier?

The cost of extending the lease will probably go up quite a bit when it drops below 80 years.

If you haven't already done this, try one of the online calculators like this one: https://www.lease-advice.org/calculator/

• Try it with the real lease end date - so it will give you a rough price for extending the lease with 80 years and 6 months left

• Then try it again with the lease end date set 1 year earlier - so it will give you a rough price for extending the lease with 79 years and 6 months left

That should give you an idea of how much extra the lease will cost to extend when it drops below 80 years.

Note that you'll also have to pay fees of £2k to £4k on top of what the calculator says.


In terms of selling - compared to the selling price of a similar maisonette with a long lease - you'd probably have to knock-off the cost of the lease extension; and the fees (£2k to £4k); plus maybe a few grand more because the buyer will have the hassle of extending the lease.

eddddy

Richard1212 said:

As I own quite a number of flats for rental income, I know something of your position, eddddy.

 First, the 80 years factor is a very arbitrary figure. Mortgage lenders will look as low as 60 years in some cases; there is no magic period of 80 years. Nevertheless, you are at a certain disadvantage in selling from the info in your post. Can you afford to extend your lease ? Look into how much it would cost to do so before thinking of selling. If you can afford approx £5,000 you may be able to extend by up to another 50 years on top of the existing duration. It's a good idea for anyone who can afford it------and most people in your position CAN afford it if they work out how much more they can sell for after the extension compared to a 70-80 year lease.

Don't look for buyers to extend the lease----they can't ( at least for several years of residence). I suggest doing it ( use the statutory route to do so ) and you should recoup your lease extension charges, especially in view of all the info in your post. Kind Regards and good luck.

Unfortunately, this post is full of incorrect, misleading and inconsistent information.

Normally, I would try to point out the specific incorrect and misleading points in a post - but to be blunt, this post is so comprehensively bad, it's not really possible.

It's probably best to ignore the entire post.

Jonboy_1984

I would second that post being nonsense.

80 years is an important milestone as it’s the threshold for marriage value to begin apply. Many solicitors recommend not proceeding with a purchase below that point, scaring many buyers off. That leaves you with cash buyers looking for a bargain as your market to sell to….

Personally I would start with the lease advise website mentioned above, and then do some searching on “section 42 lease extension”. A number of solicitors have clear comprehensive information on their websites and you can then come back with specific questions.

mortgage companies are often happy to extend the mortgage to fund a lease extension as it increases their security. Note they will need to approve an informal extension as it would likely change the lease wording and this may have a cost (although it’s called an extension, it is really surrendering and regranting a new lease).

Also worth asking your neighbours if any have extended and can recommend surveyors/solicitors or if they are looking to extend as costs can be shared, and potentially reduced if several in the same development are done together. 

LDHarv

Thank you for all of the comments above, really appreciated