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Original poster

VERY short Lease extension advice

13 replies

Bloomingpink · 23/03/2023 17:26

Hello, I'm hoping someone might be able to offer me some advice or help with this!

I'm potentially considering buying a flat which is (currently!) very cheap and within my budget. HOWEVER, it is in terrible need of repair - think ceiling falling down, damp, roof needs fixing etc. It also has a very short lease - 55 years.

I am hoping to be able to buy it and then I would need to mortgage it and hopefully do it up. However, that all depends on being able to extend the lease -which is worrying me a lot.

I think the freeholder wants a substantial amount - 50% of the marriage value of the property with lease extended. However, I was just wondering where I stood on that given that even with the lease extended, it's completely unliveable at the moment.

Would this be possible and are there specialist law firms that can help with this?

OP posts:
speakingofart · 23/03/2023 17:34

It’s probably possible but why would you want to?

hattie43 · 23/03/2023 17:35

It's a minefield and I'd walk away . The government has said it plans to abolish marriage value and reform leasehold tenure but what that looks like and when is anyones guess although they've said the 3/4th quarter this year .
I feel your flat will be a bottomless pit of money . Lease extension, service charges , refurbishment etc .
Definitely not a proposition I'd entertain.

winterbegone · 23/03/2023 17:39

Mortgage lenders won't lend on short leases, this is why they are so cheap, normally cash buyers only. I'd look for something with a long lease that needs some updating.

Greeneyegirl · 23/03/2023 17:42

A flat with that short lease would be totally unmortgageable and worthless whether or not it needs work doing. Most lawfirms with a commercial property department or a large firm with a decent residential conveyancing department could help. What you have been quoted sounds about right though, they can basically name their price. You would also have to factor in legal costs if going the formal lease extension route which would be around £5k

thatsn0tmyname · 23/03/2023 17:45

Extending a short lease can cost tens of thousands. I had to spend £9000 extending my 78 year lease so I could sell and that was 12 years ago. Walk away!

Suetcrust · 23/03/2023 17:47

I’m an experienced Landlord.
Walk away!

Original poster
Bloomingpink · 23/03/2023 17:50

Thank you for your replies - so it is cash buyers - and I have the cash to buy it and to extend (if it's not completely unreasonable!) but I would then need to mortgage it. I couldn't afford to not mortgage it. Mortgaging it depends on extending the lease. At the moment, because it's completely derelict - I wondered whether the person can really quote a high figure for the marriage value. It's estimated to be 40k. But that would be 40k based on it being a normal decent place. Given it's in such bad condition - would I not be able to successfully argue it should be more like 10-15k? Or am I completely mad?!

I really like the flat, can see the potential, want to live in it. there are no service charges and the ground rent is low £50 with no clauses like doubling or anything like that.

OP posts:
PickledPurplePickle · 23/03/2023 18:36

You can’t apply for a lease extension until you have owned the property for at least 2 years

The lease extension will be massively expensive

you won’t be able to mortgage it without the lease extension in place

PickledPurplePickle · 23/03/2023 18:38

You are unlikely to be able to argue a really low
value for the lease extension

Someone in our block just extended theirs from 76 to 99 years and it cost 10% of the property value - the lower the length of the lease the higher the premium

C4tastrophe · 23/03/2023 20:14

Why do people insist on buying other peoples problems?
Get the vendor to extend the lease or offer suitably low offer. Very, very low.

Jmaho · 23/03/2023 21:08

You're missing another problem. Even with the lease extended you have said yourself that the property is derelict. You will struggle to get a mortgage on it because of its current condition even with the lease extended. It's an all round terrible idea

Original poster
Bloomingpink · 23/03/2023 21:39

Thanks everyone. I think I will have to bow out. I hear what you’re saying and I can’t afford the costs, with the lease extension.

it’s a shame as I think the current most likely buyer is an investor who has apparently bought hundreds of these properties to rent out and I was hoping to make it my home. I’ll keep looking.

OP posts:
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