Lease Extension

[Monty]

I want to extend my lease back to 99 years (currently has 65 years remaining). Ground rent is £50 pa and maintenance is £300pa. I could argue the flat is worth about £110,000 in the current market.

Freeholder wants 10k for lease extension.

Anyone have an opinion on this. Personally i think its quite high, thought it should be in the region of about 5k. Any advice would be much appreciated.

Thanks

 

[Gazwag]

Lease Extension Calculator...let It Do The Hard Work - MoneySavingExpert.com Forums

 

[Emily's Mum]

You might think that this is a daft question, but how long have you got left on your mortgage?

 

[Monty]

You might think that this is a daft question, but how long have you got left on your mortgage?

Unfortunately, being a FTB i went for the long stretch, about 30years

 

[Monty]

Lease Extension Calculator...let It Do The Hard Work - MoneySavingExpert.com Forums

Thanks mate, i'll check it out.

 

[Couldn't Be Hyypia]

Do leaseholder have some rights to buy the freehold? What's the rules on that?

 

[Monty]

Do leaseholder have some rights to buy the freehold? What's the rules on that?

Yeh i think if myself and the leaseholder downstairs decide we want to buy the freehold then they have to offer it to us. Might be wrong. Although the freeholder has said he wants 20k for the freehold from each of us.

 

[wilcoxjnr]

As a leaseholder, you have the right to "enfranchise", which is basically get together and purchase the freehold. It should be up to the freeholders surveyor to decide a price, and there is a formal legal process to go through, issuing notices etc...

However, you are perfectly entitled to appoint your own surveyor to come up with what you and your neighbour would offer as a fair price. No doubt that this will be much cheaper than the £20k that the freeholder has mooted...

The idea then is that your surveyor and his surveyor get together and thrash out a fair price somewhere in the middle. If the freeholder doesn't agree, then he gets taken to the LVT - Leasehold Valuation Tribunal, and they decide. Unfortunately, you need a solicitor to accompany you through this process, and fees for the LVT hearing can be pricey... But generally the surveyors know how much a place is worth give or take a couple of grand.

I am going through this process with my neighbours in the block of flats we live in. As an indication, we were quoted circa £13k to renegotiate our lease from 75 yrs back to 99 yrs. The freeholders surveyor estimated a value of £9k on the leasehold, our surveyor £7k. The likely outcome is that they'll meet in the middle at £8k, and we will own the freehold.

As soon as the freehold is ours, we all grant ourselves 999 year leases and never worry about it again! Five grand better off than renegotiating a lease (you'll pay a solicitor for that too!)

I would definately stick as a leaseholder with a share in the freehold (form a ltd company and issue 2 x shares each) as freehold flats with shared common areas are a nightmare when it comes to getting mortgages...

Oh, and dont expect any of this to happen overnight...

Feel free to PM me if you need any more info - I dont have any qualifications or credentials in this, just a bit of experience...

 

[Monty]

As a leaseholder, you have the right to "enfranchise", which is basically get together and purchase the freehold. It should be up to the freeholders surveyor to decide a price, and there is a formal legal process to go through, issuing notices etc...

However, you are perfectly entitled to appoint your own surveyor to come up with what you and your neighbour would offer as a fair price. No doubt that this will be much cheaper than the £20k that the freeholder has mooted...

The idea then is that your surveyor and his surveyor get together and thrash out a fair price somewhere in the middle. If the freeholder doesn't agree, then he gets taken to the LVT - Leasehold Valuation Tribunal, and they decide. Unfortunately, you need a solicitor to accompany you through this process, and fees for the LVT hearing can be pricey... But generally the surveyors know how much a place is worth give or take a couple of grand.

I am going through this process with my neighbours in the block of flats we live in. As an indication, we were quoted circa £13k to renegotiate our lease from 75 yrs back to 99 yrs. The freeholders surveyor estimated a value of £9k on the leasehold, our surveyor £7k. The likely outcome is that they'll meet in the middle at £8k, and we will own the freehold.

As soon as the freehold is ours, we all grant ourselves 999 year leases and never worry about it again! Five grand better off than renegotiating a lease (you'll pay a solicitor for that too!)

I would definately stick as a leaseholder with a share in the freehold (form a ltd company and issue 2 x shares each) as freehold flats with shared common areas are a nightmare when it comes to getting mortgages...

Oh, and dont expect any of this to happen overnight...

Feel free to PM me if you need any more info - I dont have any qualifications or credentials in this, just a bit of experience...

Thanks mate, that is really helpful. Considering i have a shorter lease, somewhere in the region of 8-10k to include the Freehold and i would be more than happy. I would also go down the route of staying as a leaseholder with a share in the freehold.

Gonna sit down with the Mrs tonight and sort out a plan of attack. Thanks again.