Do i really need to increase my lease to 130 years, sounds crazy....

harrys66

Hi,

Currently have 88 years left on the lease on my flat (that's in block of 40 flats built in the 1960's)

I have been told that it's a good idea to increase the lease as its what future buyers will be looking for?

Whichever solictor you ring, they want between £1000 and £1500 to do the work!

I've also told them that each of the 40 flat owners are 1/40th shareholders in the limited company that owns the lease, but they say still the same cost

Is it really worth spending the monies?

(probably be selling in the next 5 years)

Smithys_Indian_Takeaway_Order

Mortgage lenders won't typically lend against leasehold properties with less than 70 years left of the term. The fees are not actually unreasonable (I've heard much higher fees being quoted) and you will just be asked by any buyer to do this when you do come to sell. N.B. there are various pre-requisite conditions that you need to meet to be able to extend such as having owned the property for two years so you should look into those and there is typically an increased fee for getting a lease extension if there is less than 80 years remaining of the term.

gwynlas

Speak to your fellow freeholders, I presume you have a management company who carries out administration on your behalf. It would be an advantage to all of you to increase leases to 999 years rather than try to make adhoc arrangements  for shorter extensions
 Most lenders require at least 70 years to be left after completion of mortgage. If you are planning to sell in 5 years your lease would be considered as needing extension. 

harrys66

gwynlas said:

Speak to your fellow freeholders, I presume you have a management company who carries out administration on your behalf. It would be an advantage to all of you to increase leases to 999 years rather than try to make adhoc arrangements  for shorter extensions
 Most lenders require at least 70 years to be left after completion of mortgage. If you are planning to sell in 5 years your lease would be considered as needing extension. 

Hi,

It's managed voluntarily by several flat owners who are elected every year to be appointed directors of the "leasehold company"

The solictor, who has been chosen by the directors to act on behalf of the "leasehold company (aka us)", said that he cannot act on behalf of the individual flat owners as well (conflict of interest)

Not all flat owners have opted to want to increase the lease, and the ones that have, have said the solictors they have chosen said the charge will be the same (independent of the number he/she will be doing)

So I'm thinking.... in 5 years time i'll still have 83 years remaining on the lease, so probably not worth extending wrt to potential buyers seeing it as a negative (especially as I am already a part owner of the lease with the other flat owners)?

thanks

Albermarle

Can you clarify who is the actual freeholder of the property ? Will they be cooperative in extending the lease for a fair price?

harrys66

Smithys_Indian_Takeaway_Order said:

Mortgage lenders won't typically lend against leasehold properties with less than 70 years left of the term. The fees are not actually unreasonable (I've heard much higher fees being quoted) and you will just be asked by any buyer to do this when you do come to sell. N.B. there are various pre-requisite conditions that you need to meet to be able to extend such as having owned the property for two years so you should look into those and there is typically an increased fee for getting a lease extension if there is less than 80 years remaining of the term.

hi have owned it for quite a while (88 years currently remaining)

RHemmings

harrys66 said:

gwynlas said:

Speak to your fellow freeholders, I presume you have a management company who carries out administration on your behalf. It would be an advantage to all of you to increase leases to 999 years rather than try to make adhoc arrangements  for shorter extensions
 Most lenders require at least 70 years to be left after completion of mortgage. If you are planning to sell in 5 years your lease would be considered as needing extension. 

Hi,

It's managed voluntarily by several flat owners who are elected every year to be appointed directors of the "leasehold company"

The solictor, who has been chosen by the directors to act on behalf of the "leasehold company (aka us)", said that he cannot act on behalf of the individual flat owners as well (conflict of interest)

Not all flat owners have opted to want to increase the lease, and the ones that have, have said the solictors they have chosen said the charge will be the same (independent of the number he/she will be doing)

So I'm thinking.... in 5 years time i'll still have 83 years remaining on the lease, so probably not worth extending wrt to potential buyers seeing it as a negative (especially as I am already a part owner of the lease with the other flat owners)?

thanks

I think that you'll find that quite a few buyers will see 83 years remaining as a problem. 

Unless the new law comes into effect in the meantime. 

harrys66

Albermarle said:

Can you clarify who is the actual freeholder of the property ? Will they be cooperative in extending the lease for a fair price?

Hi, all 40 of the flat owners own 1/40th of the lease, a separate limited company was setup when the flats were built and every flat owner made a shareholder (equal share) of the company

forward thinking for the time

harrys66

RHemmings said:

harrys66 said:

gwynlas said:

Speak to your fellow freeholders, I presume you have a management company who carries out administration on your behalf. It would be an advantage to all of you to increase leases to 999 years rather than try to make adhoc arrangements  for shorter extensions
 Most lenders require at least 70 years to be left after completion of mortgage. If you are planning to sell in 5 years your lease would be considered as needing extension. 

Hi,

It's managed voluntarily by several flat owners who are elected every year to be appointed directors of the "leasehold company"

The solictor, who has been chosen by the directors to act on behalf of the "leasehold company (aka us)", said that he cannot act on behalf of the individual flat owners as well (conflict of interest)

Not all flat owners have opted to want to increase the lease, and the ones that have, have said the solictors they have chosen said the charge will be the same (independent of the number he/she will be doing)

So I'm thinking.... in 5 years time i'll still have 83 years remaining on the lease, so probably not worth extending wrt to potential buyers seeing it as a negative (especially as I am already a part owner of the lease with the other flat owners)?

thanks

I think that you'll find that quite a few buyers will see 83 years remaining as a problem. 

Unless the new law comes into effect in the meantime. 

oh ok .....

Albermarle

harrys66 said:

Albermarle said:

Can you clarify who is the actual freeholder of the property ? Will they be cooperative in extending the lease for a fair price?

Hi, all 40 of the flat owners own 1/40th of the lease, Freehold ?a separate limited company was setup when the flats were built and every flat owner made a shareholder (equal share) of the company

forward thinking for the time

Is my correction correct, because it is a bit confusing ?

harrys66

Sorry no

It has to be leasehold, as the land all the flats are built on belongs to *all* the flat owners

hence the reason why *each* of the flat owners, own 1/40th of the company that owns the lease

no other third party is involved