Leasehold at 65 years

[LunaLunaDot]

We're viewing a flat on Saturday that looks perfect. The leaseholder lives in the flat upstairs, and ground rent is £10 a year. The flat has clearly been lived in for a long time, and the leasehold is now at 65 years.

I know it could cost us a lot to update the lease, maybe 17k, and we can reflect this in our offer.

Does anyone have any experience in adding years to a lease? What questions should I ask the agency on Saturday? Is there a way I can find out exactly how much it would cost to update?

We're currently selling our flat and had stupidly let the lease slide to 79 years, so we extended it before we put it on the market. It's easy to do - the freeholder sends their surveyor round (which the leaseholder has to pay for), then they'll come up with a valuation. I would therefore ask the EA if the vendor can arrange to have it valued asap. You shouldn't be paying for the survey at this stage.

Thank you! That's really helpful, I'll do that.

I extended my 72yr lease about 5 years ago. It cost £5k to bring it to 99 years. They asked for £8k for a statutory 90 year extension and I couldn't raise the difference at the time. It will need extending again in the next decade or so, next time will be a statutory extension. The whole process took about 3 months and was fairly painless.

The cost of lease extension will depend on the length of lease left and the market value of the the flat. 65 years is substantially below the marriage value. Also the freeholder could choose to be a pain. If possible I would insist on this being done before purchase, or a substantial reduction in price (x2 estimate of extension coats, due to costs and risk). Mortgage cos may not even accept the property as is.

My 67 year lease cost £32k + fees to extend. If we'd done it as 70 years it would have been £8k less.

You will need a surveyor to work out the marriage value, don't take an agent's word or a "the freeholder has indicated they'd accept Xx", get a proper survey done.

I would ask the current leaseholder to get the ball Rolling as otherwise you have to wait 2 years which will increase the cost.

OP just checking - in your original post you referred to the leaseholder as living in the flat above. Its the freeholder that you need to engage with in respect of the lease extension, not another leaseholder.

Also, it does need sorting out before you buy. You are unlikely to get a mortgage on a flat with only 65 years.

Yes, sorry the freeholder lives upstairs. It's basically a house split in two so he's taken the legal responsibility for the building. It's on for £140,000 so I'm hoping to extend to 99 years won't be a ridiculous amount.

Thank you, I have a much better idea now for what ask without being fleeced by the estate agent. You're right, we'll never get a mortgage with such a short lease so it needs to be sorted before we buy.

You usually add on 90 years rather than extend to 99. It's a lot of hassle/expense just to add 34 years at this stage. Check out the Leasehold Advisory Service website. Ours cost 16k to buy another 90 years. Our freeholder was very difficult though and it was stressful. It depends on what the freeholder is like to a certain extent. Are you entitled to buy a share of the freehold? I would check that out too. You also need a specialist solicitor, your average conveyancer is not a leasehold expert.

yep, defo check the option of getting a share of the freehold.
www.moneysavingexpert.com/mortgages/buy-freehold-right-to-manage

You need at least 50% of leaseholders to want to do it. I'm not sure how it works when there are just two flats, worth some digging though. It will be more attractive come sale time.

If the current leaseholder is arranging the sale (ie, it's not a repo or a probate sale), by the far the easiest and cheapest way of extending the lease is by getting him/her to do the initial paperwork - from memory, it's a Section 42 notice - and then assign it to you. You then buy the flat knowing how much it will cost to extend the lease and you do not have to wait for two years of ownership for the right to extend to become mandatory.

If you the current leaseholder can't/won't serve the notice, then be careful of any deal the freeholder offers before that two-year period lapses: lots are slipping new clauses into the leases at the same time and making ground rents spiral.

Thanks Lala that's really helpful, I was worried about the two year period but that sounds like the best solution. From what I can gather the flat was lived in by an elderly relative of the sellers, and they've put it up with a few different agents so I'm guessing they're desperate to sell. They're put it up for market value, even though the lease is so short so they're going to have to do some leg work get the place sold.

Owning a share of the freehold would be the dream Tulips, but I think that might not help us get the initial mortgage. It's definitely something to look into though.