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New flat can't extend lease

(6 Posts)
traindelay Sun 09-Apr-17 15:23:37

Ive recently made enquiry about a lovely flat for sale which is heavily discounted and been on the market for ages due to issues with the lease.

It's a low lease, and the estate agent confirmed that the leaseholder is refusing to extend which is why it's so cheap. In fact it has been under offer a few times but it's fallen through due to buyers not being able to resolve it. So lots of red flags here I know.

However, i would love to think there is a way around this, does anyone have any advice/experience?

Thanks in advance.

traindelay Sun 09-Apr-17 15:30:52

I would be a cash buyer

WeAreEternal Sun 09-Apr-17 16:47:43

We bough one of these in central London when we were n our early 20's.
The flat was incredibly cheap as there was only 23 years left on the lease and the leaseholder had categorically stated there was no chance of a renewal for any price.

We weighed it up and worked out that for us it was worth it and bought it.
We lived there for a few years and then we rented it out for a while and we now rent it out on a short term basis via airB&B.

We did the maths and if we had rented in that area for the time we lived there that money plus the income we have and will have generated from renting it out will cover what it cost us to buy it plus a bit little extra.
We also got the enjoyment of living in a swanky part of London in our 20's and owning it was very good for our credit rating.

It's hasn't been perfect though, and loosing it in a few years will be really hard. I don't know if I would recommend doing it, you need to work out whether is makes financial sense for you.

Fleurchamp Sun 09-Apr-17 16:59:03

Once you own the flat for two years you can serve notice to renew BUT the premium will be £££.

You will not get a mortgage if there are less than about 65yrs remaining of the term.

Alternative options - if the seller has owned for more than 2 yrs make them serve notice on the landlord on exchange and assign the benefit of the notice so you get to carry the process on.

Before you do anything you should find out how much it will cost to extend the lease and check who the landlord is (some are exempt from the law forcing them to grant lease extensions).

peukpokicuzo Sun 09-Apr-17 17:48:20

If there is no possibility of extending the lease then you basically need to work on the assumption that this place is for long-term rental. It is not an asset. It is not getting you on the property ladder.

If that works for you, then the price you offer should be based on how much you'd be happy to pay for the number of years of rent that there is left on the lease, using "net present value" discounting.

traindelay Mon 10-Apr-17 17:51:26

Thanks for all your helpful advice.

It's probably more difficult to solve than I hoped - hence why it's still on the market!

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