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Lease extension?

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Comments

  • NervyBuyer
    NervyBuyer Posts: 109 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    My valuation was £375 + vat so £450 total. It was a 'desktop' valuation (£500 + vat if you wanted an in-person visit) which is money for old rope but you just have to accept it (I took all the measurements myself and created a floor plan, the valuer then looked on rightmove for local sold prices and did a very simple calculation for the premium, the details of which are all in the public domain, so basically they just tell you what you already know but the process needs it written down by someone qualified). I think I got 3 quotes which were all comparable (I did find it hard to get hold of both surveyors and solicitors who undertook this sort of work).

    I can't remember exactly what my solicitors fees were, I think it was in the region of £1200. The property (2-bed maisonette) is in an expensive area (not Chelsea though!) but I wanted a local solicitor and one I could rely on. They charged exactly what they quoted at the start.

    Those are the only expenses that you are in control of, the rest will be entirely dependent on your freeholder.
  • eddddy
    eddddy Posts: 17,500 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 9 October 2024 at 9:59AM

    It might help to summarise some of the background steps in a statutory lease extension:

    • 1) The leaseholder serves a section 42 notice on the freeholder with an offer price. e.g. "I'm offering £8k for a lease extension"
    • The freeholder can reject the section 42 notice if it contains technical errors. (I've come across cases where even solicitors have made errors with this.)
    • 2) The freeholder responds with a counter offer. e.g. "I'm rejecting your offer of £8k. I want £15k"
    • 3) The leaseholder and freeholder negotiate/argue about the price
    • This tends to be a technical negotiation/argument about Yield rates, Deferment rate, property value, etc.
    • 4 onwards) Once you've agreed a price there's a lot of legal paperwork to deal with, and strict timescales


    Some people serve s42 notices themselves - without a solicitor or valuer. But if you make a technical error on the s42 notice...
    • A 'nasty' freeholder might reject the s42 notice
    • A 'nice' freeholder (hopefully a council would be 'nice') can decide to ignore the technical errors

    You might want a valuer to help you decide how much to offer initially, and to decide whether the freeholder's counter offer is reasonable...
    • A 'nasty' freeholder might make a ridiculously high counter offer
    • A 'nice' freeholder (a council?) might make a reasonable counter offer

    You might also want a valuer to do the technical negotiation in step 3 for you.



    So you could save a chunk of money by not using a valuer, and not using a solicitor for the initial stages - and if your freeholder is nice, fair and honest it might work out OK.

    But for example, if you mess up (e.g. miss a deadline), your lease extension application can be deemed withdrawn - and you have to wait a year until you can start again.





  • That's a really helpful summary and illustrates why I was 'happy' to pay for the valuer and solicitor on my side, and would highly recommend doing so despite it feeling like something you could do yourself.
  • youth_leader
    youth_leader Posts: 2,745 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Fingers crossed for you NervyBuyer.  My aunt is only paying her surveyor on the IOW £150 plus VAT, I think he feels sorry for her.  She was trying to pay him the valuation fee :(  I swing between irritation and pity, bless her.



    £216 saved 24 October 2014
  • RHemmings
    RHemmings Posts: 4,519 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Fingers crossed for you (and everyone) from me too.

    For the OP, just a minor vote that I too would 'get on it' if I had a lease with 83 years left. At the most I might wait another year to see if the laws change things for the better. But, without marriage value being involved (more than 80 years) it's possible that a change to the discount rate could actually make it more expensive to extend the lease. Note: it's not known whether the discount rate will change when (if?) the new laws come in. (Unless there has been progress I'm not aware of). So, it could be a crapshoot as to whether it will be cheaper or more expensive in the future. 
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