FTB cash-only flat with short lease and major works pending

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81880098#Comment_81880098

From the OP.

The property is listed at £130k and is a probate, cash-buyer purchase due to the lease only having 54 years remaining. A neighbour on the building committee reportedly bought their share a few years ago for around £750, but I don’t yet know whether that figure would apply now or what the exact process/cost would be for me.

I think the OP would like some input on the possible cost of extending the lease, but the reply posts have mainly concentrated on the renovation costs.

I agree that it is impossible to use the flat that sold at £160K as a comparison, without knowing what the lease remaining on that flat was.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81880196#Comment_81880196

Your back of envelope calculation much appreciated.

Not sure what the £750 the OP mentioned related to, but certainly did not sound like any kind of realistic cost to extend a lease that had declined to this extent.

As I said, short leases can be treacherous terrain for FTBs.

eddddy

juicyluce9  said:

A neighbour on the building committee reportedly bought their share a few years ago for around £750, but I don’t yet know whether that figure would apply now or what the exact process/cost would be for me.

Bought their share of what?

Are you saying the flats are 'Share of Freehold'?

If the flat is 'Share of Freehold', the cost and process for extending the lease could be completely different from 'standard' lease extensions.

In theory, the joint freeholders might have decided that they'll extend their leases for free. They just have to pay legal costs - which could have been £750 a few years ago.

But any half-competent estate agent should have explained that to you.

And the executors should have arranged for a lease extension on completion - in order to make the flat more saleable and mortgageable.

So either the executors are a bit daft - or that's not the case.

Either way, you really need to find out more info.

peterhjohnson

https://forums.moneysavingexpert.com/discussion/comment/81879977#Comment_81879977

The pricing may have allowed for the problems but it might not. The asking price of property is often not a reliable indicator of the eventual sales price

ExEstateAgent

You need to confirm the following;

Ground rent per annum?

Is there a sinking fund?

Who is the freeholder?

What is the likely sale price of a flat in the same block in good condition with a longer 100 plus year lease?

You can then get some advice on the likely cost of a lease extension, take that into consideration with the renovation works and the upcoming roofing costs and decide what you want to offer.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81882001#Comment_81882001

All sensible questions no doubt, but highly doubtful the average FTB would be capable of coming to an informed decision as to the overall financial/legal implications of any answers.

Buying a straightfoward long leasehold flat is complicated enough for most FTBs without delving into the archane world of short leaseholds and particularly this one with a significant capital spend on roof renovations clouding the immediate horizon.

Frankly there was enough information in the OPs opening post which led me to wonder why (beyond the asking price) they were pursuing it in the first place.

Advice? back away and find something immediately mortgageable with fewer complex issues.

juicyluce9

https://forums.moneysavingexpert.com/discussion/comment/81880098#Comment_81880098

Thank you so much for the advice! I have been wavering on making an offer due to the number of uncertainties and it seems that the overall consensus is that it would be a bit of a minefield for a FTB

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81890894#Comment_81890894

Wise decision!