Lease extension on flat with known aggressive London freeholder ... any advice?

[w1dino]

We're buying a flat with ~90 years on the lease remaining in central London.

The freeholder is the Wellcome Trust who are known to be aggressive and have quite literally made a woman destitute through legal proceedings when she challenged her service charges...

Has anyone had any experience with the Wellcome Trust (a long shot) or any experience dealing with these large corporate freeholders whose main interest is of course to maintain and extract value from their property portfolios?

Are there any things we should be cautious about? The seller of the property is going to begin proceedings to extend the lease (at our expense) once we have exchanged.

Many, many thanks from a naïve first time buyer!🤗

I've already sent you PMs but I wanted to add. It is a statutory calculation. The only thing up for debate is the freehold value of the property and that's not really debatable if you've just bought it as that sets the value.
So you should be fine, just get a solicitor that knows what they are doing (and if there's any actual debate about value then get a surveyor involved). Check the claim notice is put in properly so you get the benefit of it.

Yes, thanks cinnamonandcoal for your helpful PMs ... really appreciated your help.

I wanted to add that Michael Gove has been in the news this week about wanting to finally reform leasehold.

I really would not touch a leasehold property until at least these reforms have been put in place (which might take a while...).

SE14 and more specifically Telegraph Hill is full of share of freehold Victorian villa conversions.

You don't need to extend the lease at this stage - marriage value doesn't kick in until 80 years (I think). They have to permit you to extend it though and there is a formal process. The only advice I would have is to follow it.

When I was looking, we saw a flat where Southwark Council was the freeholder. A quick google showed that they could be a nightmare so we walked away from it. A difficult freeholder can make life very difficult. Don't underestimate how difficult. (Even though we own share of freehold, you still need to comply with the lease and that requires permission from the other freeholders. Everything takes an age to get done).

I always laugh at the comments that you should avoid buying leasehold. Does anyone appreciate the actual costs of a house in London? I bought my flat for £400k (in 2016). A house on my road costs £1.5m.

I agree @kirinm. I'm in Surrey rather than London but house prices are mad here and there was no way we could afford a house. It's all very well for people to say move as far out as you need to to be able to afford a house but that isn't always possible. When we moved to where we are now we both had elderly Mums who needed us close by.

The only thing I would say is make sure you have a decent length lease. We knew nothing about leasehold and our solicitor didn't point out the risks of a short lease and we aren't in a position to extend. Luckily we don't want to move so it's not an issue but we would have pushed to have the lease extended if we'd known.

We are about to start negotiating a lease extension on rental properties whose freehold is owned by the Wellcome Trust. The RICS I've been recommended by the estate agent wants to charge a whacking fee just for establishing the price of the lease extension, before any negotiations are entered into. Does anyone have a good chartered surveyor who won't charge an arm and a leg for this service?!

''@kirinm · 31/01/2023 10:40
I always laugh at the comments that you should avoid buying leasehold. Does anyone appreciate the actual costs of a house in London? I bought my flat for £400k (in 2016). A house on my road costs £1.5m.''

You can laugh all you want...

I had a leasehold flat in London for 12 years and it was an endless series of issues:

• service charge rocketing each year but freeholder not doing works in the communal parts when needed and having to complain every time for something to be fixed
• having to challenge service charge costs all the time and ask to see invoices because the freeholder often charged the wrong amount
• rip off ''management fees'l added to the service charge
• having to pay ground rent
• the ridiculous cost of lease extension
• we also got caught in the cladding scandal (no cladding but we had balconies) and it took 3 years for the freeholder to get the survey and EWS1 paperwork for the flats so they could become sellable again. 3 years of endlesss stress.

I will never buy leasehold again and I always advise people not to touch it. I much prefer moving out of London than having to go through the same nightmare.

You obviously bought in a big block. I'd never do that.

There are plenty 'share of freehold' flats (which are still leasehold but with more control) and there are also plenty of non-block leaseholds. Rather than never buy leasehold, people should be more aware of what they're buying.

Everyone would prefer freehold but to buy a house that costs the same as a flat is going to involve a lot more than moving out a bit.

@kirinm ''You obviously bought in a big block. I'd never do that.''

Nope. It was a small brick building with only 3 floors.

Then why did the cladding impact you?