Leasehold issues are a regular theme on my blog at Fridaysmove. Your best course of action would be to have a proper survey and valuation carried out. You can?t rely on a valuation carried out in connection with a mortgage application, and in any case you wouldn?t be in a position to make a mortgage application until an offer has been accepted.
I appreciate that getting a survey/valuation costs money, but it could save you a lot in the long run. If you make a realistic offer and explain that it is based on a professional valuation, the seller?s agents are more likely to recommend that the seller accepts your offer. Also the survey might reveal defects which will affect the value.
Explain the situation regarding extension of the lease to the surveyor ? he or she will need to know exactly how long is remaining on the lease as it will affect the calculations. I certainly wouldn?t rely on the estate agent?s figure of £10k for the lease extension.
Something you need to be aware of - when a buyer wants the existing lease extended the usual procedure is for the seller?s Solicitors to serve a statutory notice on the freeholder before completion. The benefit of that notice is then transferred to the buyer on completion of the sale. This means that the buyer then has to complete negotiations with the freeholder and deal with the completion of the lease extension.
It is better if the seller can get the lease extension sorted out before completion of the sale, sometimes that is done if terms can be agreed with the freeholder without going through the statutory procedure. Then you could buy the property with an already extended lease.
But it often takes months to negotiate and complete an extension, and sellers usually don?t want to wait. If you were to buy on the basis that you would be dealing with the lease extension after completion, you will need to take into account that you would not only have to pay the freeholder for the extension, but also his surveyor?s and solicitor?s costs, as well as you own.
Sorry if this all sounds a bit complicated, but that?s one of the reasons why it?s well worth getting professional advice at the outset. The seller and the estate agents shouldn?t complain if you want a survey before putting in an offer, it shows that you are seriously interested.
I hope that this information helps. I have written many more articles about leasehold property issues on my blog at www.fridaysmove.com.
Good luck!
Tony