Buying a flat with 110 years on the lease

[LilacNight]

Hi everyone - I viewed a flat today which I really loved, however the only bad thing about it (potentially?) is that there is 110 years left on the lease. When I asked the estate agent about this she said that the current owner had already extended it in 2010 - presumably at that time the current owner would have wanted it to have the maximum number of years possible but was only allowed 120? Can I have peoples opinions on this please, would you consider buying a flat with a short lease like this? Conscious that it might make it more difficult to sell or that the value of the flat would go down along with the amount of time remaining on the lease.

That's not a particularly short lease OP. My bank wanted at least 70-80 years to lend, so 110 is fine.

110 years is not really that short.
There are limits to what can be charged wrt to extending- it shouldn’t be that much in your case. I also believe that it’s not possible for a lease extension to be denied but I am not a solicitor so probably best check that one.

Doesn't seem short. Around 100 years is usual. My solicitor advised me to turn down one with 80 years on the lease.

That’s not short at all, we just bought ours with 94 and no one was remotely concerned about that.

I wouldn’t call that short at all - over 100 years is fine, 90 is probably fine, 80 is borderline.

Freeholder here (hopefully not for long though!). 110 year lease is absolutely fine. No need to worry until 80 years (then currently marriage value comes into play).

It will outlive you and you'll most probably move out decades earlier.

Not short at all. Short would be anything less than 50 years, IMO.
100 years or longer is probably longer than the flat will stand anyway.

Is this likely to be your "forever" home? I might be concerned if I was likely to be there for more than 10-15 years but any less than that will be fine. You should be able to extend the lease back to 120 years when you are ready to sell but the cost of doing that can increase dramatically if the number of years remaining pre-extension has gone down quite low, so you might find its a problem (or a problem for your family if you are past caring by then) if you stay there a long time.

Most flats only have 125 lease even at max when new. Most do t look to renew their lease until somewhere between 80 and 90, so you’ve got a good 20 years to go. It’s fine.

New lease extension will take you up to 990 years when the law changes come in. This could take several years but you can easily wait for that. You could sell in the next 10-15 years and your flat will still be desirable with the lease it will have.

A bigger Q is about ground rent. What is ground rent on the flat and does it escalate? If so, how often and by how much? It will be this that can make borrowing or selling difficult rather than 110 year lease.

That is not a short lease. If you are still there in 10 years you might extend it for a couple of thousand to keep it saleable, but 110 years isn't an issue at all.

What happens when the lease is over? Who gets it?

Thanks everyone. @WombatChocolate I will read up on this because I wasn’t aware of any change to the law.

I had it in my head that most leases are ideally 900 years plus but maybe not?! The ground rent is £10, the service charge is £463.

How might I find out who the freeholder is, is this something I can just ask the estate agent or would I need to look on the land registry website?

Where is this flat? This is an exceptionally cheap service charge. Does it include a sinking fund to pay for major repairs further down the line? A colleague was attracted by low service charges, but was later landed with an enormous bill, which thankfully for her, her parents were able & willingly to bail her out. Please do your research.

That's plenty. I bought a flat in 2016 with a new 125 year lease and figure I'd have it fit 25 years and it would still be fine - many new leases are 99 years. The 999 year Jesse's you are thinking about are more with large mansion blocks I think.
The freeholder should be on the head lease, though it is likely there is a management agency running it. As part of the sales pack you should get all the accounts associated with the running of the building.

@Jobseeker19

What happens when the lease is over? Who gets it?

It reverts to the freeholder but only a complete idiot let's there lease run out!

If you do it before 80 years it is a lot cheaper to do. Once it is below 80 years then marriage value is taken into account and it gets more expensive as each year passes. A lot or mortgage companies don't like leases below 80 years for this reason and under 70 years most will be unmortgageable.

@OrcharD14 @WombatChocolate it’s in Eccles in Salford/Manchester. Sorry if I sound stupid but how do I find out whether the ground rent is likely to escalate or if there is a sinking fund for repairs, is this something the estate agent is obliged to tell me upfront or is this stuff that would be asked later down the line after an offer is accepted? I’m clueless! I just know I really liked the flat and could imagine living there

[quote LilacNight]**@OrcharD14* @WombatChocolate* it’s in Eccles in Salford/Manchester. Sorry if I sound stupid but how do I find out whether the ground rent is likely to escalate or if there is a sinking fund for repairs, is this something the estate agent is obliged to tell me upfront or is this stuff that would be asked later down the line after an offer is accepted? I’m clueless! I just know I really liked the flat and could imagine living there[/quote]
It will all be available in the management pack to your solicitor when you have an offer accepted. How many flats are in the block? The ground rent at £10 sounds fine, a lot of properties have a small ground rent figure. The service charge could be fine depends on how big the block is and what the condition of the building is like. You need to check all communal areas and the actual fabric of the building to see if it is being kept up together.