Should we extend our lease

[unmp]

Hi everyone

Posting here for traffic really. Currently own a first floor maisonette with garden in south London valued at £290,000.

On the market currently and We had an offer of £285,000 recently as lease is at 84 years

Potential buyer said they would pay the £290k if we extend the lease, however freeholder quoted us £5500, plus their legal fees of £1250, plus our own would be around £1850 but would take the lease to 174 years by adding a further 90 years. As the extension would be costing us nearly £10k I no longer want to even sell at £290 and feel as though we would be putting ourselves in a detrimental situation after forking out £10k to extend the lease, then to accept the £290 would be like putting ourselves in £5k deficit if that makes sense and the buyer would be getting an extremely good deal with a very long lease

I am minded to stay put but extend

My question though is how much value do you think the extension would get us eg if with 84 yrs it's worth £285, how much would the flat be worth with a lease around 174 years as an estimate?

It won't be easy to fund the extension and I would need to take a loan of around £10k to ensure I can complete the transaction. I have been approved for a personal loan of 10k over 5yrs but have to then pay around 3k interest which scares me, my plan is when we remortgage in around 18months to use some of the equity to pay off the loan before fixing again does this sound like a sensible plan?

If we sell before the fixed period ends I am hoping that the price we get enables me to pay off the loan in addition to having enough for my onward purchase

This is my first property and really need some advice as I have never been in this situation before and the idea of such a huge debt of £10k scares me as I have tried so hard to be debt free except the mortgage obviously

Bumpity bumping shamelessly 🥺

Why not just sell it for £285 and let the new owners worry about extending the lease?

I don’t think you will be able to increase the price over its valuation by extending the lease, no matter how long you extend it for.

If you do extend it I would try to negotiate a longer period than 90 years, since the legal costs are so high.

What were your reasons for deciding to sell in the first place? Are they still valid?

Like PP if you have an offer for 5k less than you’re asking it’s a pretty good deal and then they can deal with the hassle of extending the lease. It’s a buyers market atm anyway so almost no one is getting their asking price.

Thank you for your message, it will be an additional 90 years so plus the current 84, the lease becomes around 174yrs so significantly more years and so can be passed onto my children without fear it will run out in their lifetimes

I guess as we are struggling to also find our ideal onward purchase in the area we want to be in, it feels like extending the lease is a bit of an investment in case we end of staying on. The freeholders offer is valid for 6 months so I am worried that if we don't 'lock in' the price, that this may again go up!

We wanted to move to the next borough which is nicer but more expensive. My youngest now finished primary in the area and we no longer need to be here

@unmp

There is a change to the law coming in that will make it cheaper. I just found out yesterday it had gone through. If you're not in hurry to sell, I'd wait until that goes through. Hopefully it'll make all leases 999 years too.