Extending a lease on a flat

spayne82

I have had my one bedroom flat for just over a year and it currently has 61 years left on the lease.
I have been told I can extend it but will cost around 10-20k! Ahh.
Does anyone have any advise on how i can negotiate this cost without the use of solicitors?
Many Thanks

Doozergirl

You don't need a solicitor to negotiate the price. It's like buying a house.

They tell you their asking price, you check it (you can get you own desktop valuation for about £75) and then you barter as hard as you can. If it's wildly out then you can take your freeholder to the Leasehold Valuation Tribunal (I think it's called, I'm tired) and they can decide for you but that in itself is expensive.

£10-12,000 sounds the right sort of ballpark to me

spayne82

Thank you for your help )

Richard_Webster

Have a look at:

http://www.landlordzone.co.uk/forums/showthread.php?t=11080

where you will find a way of doing an approximate calculation of the likely cost.
Going to the LVT will cost, and landlords know that, so they pitch their figures above what the LVT would order. This assumes a 90 year extension on top of existing length at a nil ground rent.

The statutory right to an extension is only available for those who have owned their flat for 2 years so the landlord may also seek to take advantage of that fact as well. They might trade off some of the lump sum cost against an increase in ground rent.

Were you warned by your solicitor when you bought the flat that a lease extension would be expensive and effectively necessary to enable you to sell or remortgage in the future? If not, then you might consider suing your solicitor.

EdInvestor

Richard_Webster wrote: »

This assumes a 90 year extension on top of existing length at a nil ground rent.

It may be worth asking how much the landlord would want for a shorter term - eg a new 99 year lease with some ground rent payable, tather than 90 years on top of the years remaining.

Gatz

I live in a block of 33 flats with 69 years remaining on the lease. The landlord is asking for between £9-10k per flat for a standard 90 year extension on top of the existing lease, depending on how much he would discount for bulking legal fees for a batch of residents renewing simultaneously. (The sum being asked is the landlord's offer, but our management company's lawyer advises that is 'in line' with the amount he would expect.) I have no immediate plans to move but appreciate that the only scenario where it would not (eventually) be to my advantage to extend is if I never move again.
At present 2 bed flats (like mine) are valued at £125k; flats in this and similar neighbouring blocks have never breeched the stamp duty threshold. If the housing market dips by up to 30%, as many people predict, would the cost of extension be likely to be much lower? I just wonder if it's worth hanging on for a year and seeing what the cost of extending would be then.

Richard_Webster

If the housing market dips by up to 30%, as many people predict, would the cost of extension be likely to be much lower?

Logically that should be the case as the marriage value element and the value to the freeholder of regaining the property in x years time will be percentages of smaller base figures.

I suspect there will be an element of landlords trying to second guess the market. if they think the market will go up again they may quote a highish figure and generally do whatever they can to slow the negotiations etc. If they think it will go lower and it is unlikely they can stall for long enough then they will want as good a deal as they can get as quickly as possible!