Extending Leasehold

[jon1965]

Hi
Need some advice please

My OH lives in a leasehold property and has lived here for 15 years. There is about 66 years left on the lease and the ground rent is £40 per year.

If we want to move, is it best to extend the lease first and if so how do we go about it.

I say we, but it is his property and I have no intention of having my name on either this or any new property as I do not live here

Thanks in advance
Jon

[Celestine]

Re: Extending Leasehold

She needs to contact the Freeholder for a Lease extension or consider buying the Freehold. Neither will be especially cheap I'm afraid.

Most mortgage companies won't lend on a lease that is below 70 years so if you want to move either of the above will need to happen first.

[jon1965]

Re: Extending Leasehold

Thank you Celestine,
Looks like it will be about 10K from what I have worked out.

BTW you fell for it and didn't read the post....not a she:clap2:

[FlamingParrot]

Re: Extending Leasehold

I have a thread about this same subject on another forum. When you say 'move' I take it you actually mean 'sell', because you/he could move without selling, you can buy or rent another property and let out the one with the short lease, that's precisely what my friend (the one I posted the thread for) has been doing since 2000. She bought a flat in London with a 99 year lease in 84. By now there's just 70 years left and this could make it hard for a buyer to obtain a mortgage on it. She's been living in Spain since 2000 and lets out the flat in London.

For reference, below is what Plan B posted on that thread:

Go to www.lease-advice.org or telephone their FREE Helpline on 0207 383 9800.

A lease extension is easy. After 2 years of ownership it's an automatic legal right at a price based on a legal formula (marriage value and Ground Rent multiples etc) which can be determined by the Leashold Valuation Tribunal - it's not up to the freeholder to charge what he wants. Once the formal notice has been served by the current lessee that legal right travels with the sale to the purchaser. Usually it's timed so that the lease extension comes into force simultaneously on completion of the sale and most lenders are happy to provide the purchaser with a mortgage conditional on the extension. In any event lenders will provide a mortgage to the purchaser as long as there is a minimum of 20 years left on the original lease after the mortgage term expires. However the purchaser will then need to have owned the property for a fresh two year period before they would qualify for a lease extension so it's always done at the point of sale.

Your friend may also have the legal right to enfranchise the freehold of the building too. As long as there are two or more qualifying leases (FP mentioned two?) and the curent freeholder doesn't live on the premises then the lessees have the automatic legal right to 'seize' the freehold and manage the maintenance of the building from then on. Everything is explained in that website at the top of this post.

Mortgage providors are very happy to lend on properties already secured to them for lease extensions because it increases the value of their security. Quite often the lessee selling the property will get a further advance from their current lender to pay to extend the lease before marketing.

[jon1965]

Re: Extending Leasehold

Thanks FP
Been kind of a crappy evening, we are both a bit upset. Will be looking at extending the lease asap then deciding if it's best to do up before sale or sell as is.
Will be on the phone tomorrow to them

[Celestine]

Re: Extending Leasehold

Thank you Celestine,
Looks like it will be about 10K from what I have worked out.

BTW you fell for it and didn't read the post....not a she:clap2:

:doggieyes: Oh dear and as a Brighton lass, I'm very ashamed LOL! x

[jon1965]

Re: Extending Leasehold

As a Brighton lass do you know any str8 men?

Do not worry, I am not at all offended, I just take the mick

[Celestine]

Re: Extending Leasehold

As a Brighton lass do you know any str8 men?

Do not worry, I am not at all offended, I just take the mick

LOL nope!! And as I worked for Brighton Council for years, especially not!! I believe we were named UKs largest LGBT employer!! X

[jon1965]

Re: Extending Leasehold

Been looking at the site fries my brain this morning. Tried calling but I was caller No 8 so will call back later.
I am sure it won't be that difficult but just need the heads up of how to start

Waiting for the response to the email regarding the threats last night

[FlamingParrot]

Re: Extending Leasehold

Been looking at the site fries my brain this morning. Tried calling but I was caller No 8 so will call back later.
I am sure it won't be that difficult but just need the heads up of how to start

Waiting for the response to the email regarding the threats last night

This is the bit you're interested in --> http://www.lease-advice.org/publicat...ent.asp?item=8

...and this one relates to the calculations involved - it's also likely to fry your brain but explains it in detail---> http://www.lease-advice.org/publicat...nt.asp?item=10

[jon1965]

Re: Extending Leasehold

Thank you FP

Looks like a solicitor and a valuer are the two things needed so that L can make a decision as to the costs and timings that are best.

[PlanB]

Re: Extending Leasehold

My OH lives in a leasehold property and has lived here for 15 years. There is about 66 years left on the lease and the ground rent is £40 per year.

If we want to move, is it best to extend the lease first and if so how do we go about it.
Jon

Jon,

Your only need two things at this stage: information and a strategy, but you won't need any money

Since your bloke has owned the lease for more than two years he has the automatic legal right to a lease extension and the Landlord can't argue. However the incomer would have to wait two years before qualifying so all he needs to do at this stage is serve notice on the Freeholder and start the ball rolling (more on that later) :nerd:

Once the price tag for the lease extension (to 125 years usually) has been established and all the documents are prepared, the actual deal needn't take place until completion of the sale/purchase to the next person. The legal right to a lease extension travels with the sale so long as he's done the paperwork properly.

When he markets the property it will say "lease XX years remaining with an option to purchase an extension to XXXX years for £YY. This additional cost will become part of the negotiations. In other words the buyer will pay the cost and that will be factored into the price your partner charges for the flat. He won't have to pay for it first unless he wants to but that decision will depend on the amount of money involved (more later on that too).

I know how much you tend to worry about things so I'll be back later with the missing information :hail:


(Plan B knows this OP well from another site so it's ok for me to be cheeky at times :hug

[CleverClogs]

Re: Extending Leasehold

BTW you fell for it and didn't read the post....not a she:clap2:

:drama:

[jon1965]

Re: Extending Leasehold

Clever Cloggs, can't beat a bit of drama....

PlanB thanks, I have spoken to the leasehold advisory service and have some sort of idea what is to be done. Seems an informal approach first is the best option but all depends on what they offer

You do indeed know me well and I thought you were being nicer than usual not cheeky lol

[jon1965]

Re: Extending Leasehold

Just had an email back from the freeholders saying if he wants to go ahead they will instruct valuers (which Lee will have to pay for upfront) and also will be responsible for two sets of legal fees.

Only thing that worries me is if their valuation etc comes in high Lee would then have to pay for another valuation so is it best to go through the formal NOA route?