Leasehold extension

[Taz]

Anyone have any knowledge on extending leaseholds and costs ?

Just had a quote for extending the leasehold on mums flat and its eye watering

 

[jim8flog]

It is whatever the landlord sets.

It is the reason solicitors always advise extending the lease when first buying it to something beyond the expected purchasers lifetime.

 

[Taz]

Currently have around 15 years left on her lease and have been quoted £46K to extend and they want to put up the ground rent rate too.

We're debating what the impact on the value of the property would be if/when we need to sell, if we dont extend.

 

[robinthehood]

Have a look at Marriage value, I think that's what you're going to paying. How did the lease left get so low?
You'd have been wanting to extend long ago.

 

[GB72]

Actually, look at the Statutory method. OK the premium may be high still (to be expected if the lease has dropped to 15 years, most extend when there are around 70 years left to run) but that will get you 99 years on the present term plus ground rent reduced to a peppercorn. Get a specialist leasehold enfranchisement surveyor to give a value range for the premium to extend the lease and employ a solicitor with plenty of experience in this area. There are all sorts of issues for getting procedures wrong and missing deadlines and so it needs to be someone who is well versed in the procedure not someone who dabbles. Basically though, it will not be cheap. With only 15 years left, the lease ends soon and the freeholder can grant a new lease at the full value of the property. As such, the premium payable will be high.

 

[Fade and Die]

Currently have around 15 years left on her lease and have been quoted £46K to extend and they want to put up the ground rent rate too.

We're debating what the impact on the value of the property would be if/when we need to sell, if we dont extend.

You would not be able to find a buyer with only 15 years left. Mortgage companies need the lease to be at least the length of the loan. (25 or 35 years) I’m afraid the landlord does hold all the cards.
This might be some help....

https://www.lease-advice.org/calculator/

 

[Taz]

Correction, it's just over 40 years left. Reminder to self always fact check with elder sister ?

So we'd be paying 46 grand to take it back to 99.9 years.

 

[robinthehood]

Correction, it's just over 40 years left. Reminder to self always fact check with elder sister ?

So we'd be paying 46 grand to take it back to 99.9 years.

You need specialist advice mate, 40 years left is not great either.

 

[GB72]

Just a few bits to add to points made. Firstly, my typo. Statutory extension adds 90 years to current term not 99 and so you would have a 130 year lease at the end with no ground rent. Rest of what I say is correct.

Most lenders actually require between 60 and 70 years left on the lease. They want a full mortgage term plies 25-35 years on top.

Marriage value is an issue but has been for a long while as it kicks in when there is less than 80 years to run on a lease. OK, value of the property may have increased significantly over the last 40 plus years that have run since and hence the high premium.

As mentioned above, any negotiated deal that does not result in you getting a 130 year lease at a peppercorn rent is not good unless it is at a reduced premium as you are entitled under statute to a lease extension of 90 years on top of the current term at zero rent under the Leasehold Reform, Housing and Urban Development Act 1993 . First step needs to be the specialist surveyor to get an idea of the range of premiums that could be payable.

 

[Taz]

I just read through the letter from the property management group.
46k to create new 99 year lease.
Payment if their fees £750 + vat.
We have to pay their legal fees.
Payment to modernise lease consider ed appropriate by their solicitors to protect landlord.
Bloody hell, got us over a barrell.

 

[GB72]

I just read through the letter from the property management group.
46k to create new 99 year lease.
Payment if their fees £750 + vat.
We have to pay their legal fees.
Payment to modernise lease consider ed appropriate by their solicitors to protect landlord.
Bloody hell, got us over a barrell.

No they have not. Refer to my earlier posts. Anyone who has owned a qualifying property for over 2 years is entitled to a statutory lease extension, increase the term by 90 years and ground rent reduced to zero. The landlord cannot stop this. You get the valuation, serve notice including your offer of what premium you will pay. Notices go back and forth until and agreement is reached. If there is no agreement then a figure is set by the land tribunal. Lease will be on identical terms save for change in rent.

Been a property solicitor for 20 years so have some knowledge in this area.

 

[Taz]

No they have not. Refer to my earlier posts. Anyone who has owned a qualifying property for over 2 years is entitled to a statutory lease extension, increase the term by 90 years and ground rent reduced to zero. The landlord cannot stop this. You get the valuation, serve notice including your offer of what premium you will pay. Notices go back and forth until and agreement is reached. If there is no agreement then a figure is set by the land tribunal. Lease will be on identical terms save for change in rent.

Been a property solicitor for 20 years so have some knowledge in this area.

Thanks, how much do you charge

 

[GB72]

Thanks, how much do you charge

Whilst I have done a number of these, you really need someone who specialises in lease extensions as there are a number of deadlines during the process and if you miss one then you could be months down the road and have to start right back and the beginning. What sometimes works is to simply ask the landlord if that is their best offer so as you can do a comparison with the cost of a statutory extension under the Housing and Urban Development Act. You appreciate that a direct deal may be quicker and save on surveyor costs etc but the other route will lead to zero ground rent, a longer lease and maybe a lower premium depending on what the survey says. Amazing how that can knock some off the top of their original position.

 

[Taz]

How do we determine if the property is qualifying ?

Any suggestions where we look for a specialist in lease xtensions ?

Thanks so much for your help so far, can I pm you if needed ?

 

[GB72]

How do we determine if the property is qualifying ?

Any suggestions where we look for a specialist in lease xtensions ?

Thanks so much for your help so far, can I pm you if needed ?

Property is pretty certain to be qualifying unless it is let from a housing association or charity.

Look on the Law Society 'Find a Solicitor' website for firms. Just call them then, ask how many they do a year to see that the focus on that then go with the one you feel comfortable with. Other option, and may be a better one, is to find a surveyor to do the valuation first and see if the surveyor knows of anyone they prefer working with on lease extensions.

Happy to PM me if you need.

 

[Taz]

Ta.

 

[CliveW]

Another plus for living in Scotland. Freehold is the norm.

 

[GB72]

Another plus for living in Scotland. Freehold is the norm.

Freehold is the norm here as well. Simple fact is that in either country through you need a lease to be able to manage the unique set of circumstances associated with flats, maisonettes etc. Without a lease or similar to put in place even a basic legal framework the idea of flats becomes untenable.

There are only a few areas in the UK where leasehold houses are seen as a normal occurrence and they are mainly around Sheffield and the North West.

 

[backwoodsman]

Freehold is the norm here as well. Simple fact is that in either country through you need a lease to be able to manage the unique set of circumstances associated with flats, maisonettes etc. Without a lease or similar to put in place even a basic legal framework the idea of flats becomes untenable.

There are only a few areas in the UK where leasehold houses are seen as a normal occurrence and they are mainly around Sheffield and the North West.

Purely out of interest ... is there any particular (and/or obvious) reason as to why those areas?

 

[GB72]

Purely out of interest ... is there any particular (and/or obvious) reason as to why those areas?

Actually not really sure but I would suspect it has a connection to workers homes for factories and mills. There are a couple in Grantham near me that were workers properties leased from Belton House. Most are on 999 leases so no danger of ever needing renewing.