Extending lease as part of sale - 88 year lease

[Housemover18]

Wondering if anyone has any experience or advice. We are being asked to consider extending the lease as part of our sale (we don’t have a buyer yet but our estate agent approached me today to say they have ‘several’ interested parties who are worried about the leaseback length.

The lease is 88 years; I know that it gets more expensive below 80 years and that you can’t extend in the first two years so I understand their concerns. However am I right in thinking there is no significant difference in costs between 88 years and 83 years - so it’s not vital that it gets extended before the sale?

If we do agree to extend for the right offer how much longer should we expect the process to take? Our free holder is a London Borough - if thy affects anything? Looking at an online estimater it seems that the cost of extending the lease could be around £4K but I have no idea how much the conveyancing etc will be.

I’m also confused about the stamp duty issue. Is it based of how much the lease extension costs above the property value? The property is worth c. £300k - the lease extension c. £4K?

I would be more worried that the freeholder is a London borough. Do your homework very thoroughly, particularly if you are in Lambeth or Southwark. There are multiple cases of leaseholders being fleeced by London boroughs for shoddy and unnecessary repairs.

To be clear I am the seller. It’s London Borough of Sutton and we’ve had no problems in the 3.5 years that we’ve lived here...

You need to speak to a solicitor who is clued up about this sort of thing - speaking from experience, not all of them are. I would google 'LH extension' in your area to find a specialist.

Personally I'd have thought that extending the lease as part of the sale would be advisable - it would make the flat more saleable and help to achieve a better price. FWIW, when buying LH flats in the past - I have had two - I wouldn't even consider any with fewer than about 95 years left to run.

You won’t be paying stamp duty, you’re the vendor.

There’s no guarantee that the freeholder, whoever they are, would agree to extend the lease, and they can charge a lot for the privilege. I’d be even warier as a buyer with a London Borough, anything state owned is usually swimming in red tape.

My advice would be to extend the lease yourself, then I expect you’ll receive some more positive feedback and hopefully an offer!

Best of luck.