Leasehold Extension

Hibiscouscous

Hello,

I just wondered if I could have a little help with a leasehold extension.

For context, I am the freeholder (new to the job!). 

Leaseholder owns a flat, wants to extend lease. Has 83 years left on it. Flat is in Notting Hill, London. Ground rent £150 per year. Flat is worth about £550,000.

I am happy for him to extend lease, but obviously want to make sure I get the right price, do not want to charge him more than needed.

Online calculators have given a range, and I got a free valuation with zero down lease giving a range of around £12500 - £17000.

Obviously we could get it properly valued, but I think it costs about £2500 - £3000 and I am happy to save the leaseholder this money if we can agree a price.

I asked for £14000, he said £12,500, I said I wanted to stick to £14,000 and now he asked for £13,500 (the ground rent, £150 x the 90 years it would be extended for).

I am just wondering, does this seem fair, or about right?

eddddy

As you've said, the online calculators say that's reasonable - assuming you intend to reduce the ground rent to £0 immediately and extend the lease by 90 years.

But FWIW, 'the ground rent, £150 x the 90 years it would be extended for' isn't how you calculate the cost of a lease extension. It's pure coincidence that it gives roughly the same number as the online lease extension calculators.