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Original poster

Property not selling - lease extension? Update

19 replies

DAISYBELLAxx · 07/08/2024 10:01

Hello everyone.

I posed a thread the other day about why our property isn't selling. We have had three viewings in one month (all people called and encouraged by estate agents - no one calling in off their own backs).

The general feedback from MN was that the lease was too short. After speaking to multiple estate agents, the general feedback from them is that an 89 year lease should not be a problem as long as the price reflects it. Our estate agents is trying to encourage us to drop the price now around the £210,000 to £220,000 mark.

My partner is reluctant to sort the lease due to the money, time and hassle. He doesn't think the lease is the only issue as other flats around us in a similar budget have not sold either.

I am more in the camp that we get the lease sorted in order to make more equity. However, I don't think my partner wants to spend the time or money and would rather leave it on the market as it is. I have tried explaining that we can't have our cake and eat it too.

I have managed to find a document from the housing association which tells is how much it will be to extend the lease (please see attached). Am I correct in thinking that it will only cost us around £900 for legal fees and a lease extension, or do you think there will be more hidden fees?

We were thinking of going down the informal route so that it is quicker, we can keep the flat up on the market and advertise the longer lease length once we apply.

Here is the link to the property: www.zoopla.co.uk/for-sale/details/67811323/

Any extra advice on our options or what you think the best route for us to take would be much appreciated - it all seems like a minefield at the moment!

Property not selling - lease extension? Update
OP posts:
Original poster
DAISYBELLAxx · 07/08/2024 10:02

I should also add that my partner has a friend who just recently sold his flat with an 84 year lease, which is why my partner is reluctant to spend time and money increasing ours.

OP posts:
KievLoverTwo · 07/08/2024 10:57

That sounds suspiciously cheap.

Your OH might be cutting off his nose to spite his face.

I hope you get some more replies.

viccat · 07/08/2024 11:00

£900 sounds like only the legal fees, not the actual lease extension?

I paid around £10k for mine and that was over 10 years ago. That's why people are put off as they know it's going to be expensive. Some mortgage lenders will also not lend on a shorter lease.

sweetpickle2 · 07/08/2024 11:09

I cant read that image very well, but from what I can read it looks like the fees are just the admin fees- not actually the lease extension.

On your other thread it wasn't just the lease extension that was the issue- there was quite a big increase in the price (£45k since 2019 I think?) and no clear reason as to why. I think you'd have to drop the price to be more like what was paid for it to go down the route your partner wants to.

anonhop · 07/08/2024 11:11

When we bought our flat, we could've got a mortgage on a shorter lease (I think over 90 years) but we were looking for 100 year+ because we didn't want an issue selling it on. So I imagine lots of buyers wouldn't go for shorter leases.

We were FTB who didn't want the hassle of lease extensions (& didn't really understand them!). Perhaps investors / BTL buyers would be more open to them? But they'll want a cheaper price I'd imagine

SeLHopeful2024 · 07/08/2024 11:12

A new buyer also needs to have owned the property for 2 years before they can apply to extend a lease, so that potentially increases the costs as the lease is further reducing while they wait.

https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/buying-a-flat-with-a-short-lease/#:~:text=You'll%20have%20to%20pay%20for%20a%20costly%20lease%20extension.&text=If%20the%20flat%20has%20between,it%20while%20you%20own%20it.

CraftyNavySeal · 07/08/2024 11:13

The listing shows you bought it for 185k 3 years ago. At best I would assume you painted it and put new carpet in.

I find it very hard to believe that a flat with zero outside space has increased 45k since the high point of 2021

pinkdelight · 07/08/2024 11:14

My partner is reluctant to sort the lease due to the money, time and hassle.

Does he not have the imagination to see that a buyer would think the same? It's enough hassle buying a place without the additional burden of sorting a new lease. Much better for you to sort it then it won't be an issue any more.

whykeepchanging · 07/08/2024 11:15

I also can't read the document, but I would assume that's just admin fees.

We did it a few years ago and from memory, we had to pay for: our solicitor, their solicitor, a survey to value the property and then the lease extension which was based on the valuation.

On a property which sold for £380k I think it was about £7k in total.

People will buy a flat with a low lease, but it narrows the pool of people and people will try and negotiate

rainingsnoring · 07/08/2024 11:30

I think your partner is right that this isn't the only issue. Your main issue is the price. Why does he think the market value has risen 25%, nearly 30% from the initial price? If he doesn't want to bother with the hassle and expense of extending the lease, drop the price to around what he bought it for just 3 years ago and it will probably sell.
I've never extended a lease personally but I know it costs several thousands rather than several hundreds. It might sell for a little more if he extends the lease but there is no guarantee of this.

pinkdelight · 07/08/2024 11:30

People will buy a flat with a low lease, but it narrows the pool of people and people will try and negotiate

And those flats with a low lease are normally significantly cheaper than others. They're the ones you see on RM and go - "oh wow, there's a flat in that area that's affordable!! Oh, hang on, the lease is low so it's (for most) a non-starter".

On balance, OP, it's definitely worth investigation the actual costs and hassle of you extending the lease as it's likely to be more doable for you than a buyer.

CeibaTree · 07/08/2024 11:31

We did it a few years ago on an ex LA flat in SW London,
it cost about £7500 in total to add 100 years on the lease.We were strongly advised to do so by every estate agent who valued the place and we were on 88 years left of the lease.

we had to pay for:

our legal fees
the freeholder’s legal fees
a surveyor
the lease itself.

The lease was around £6500, so about a grand on the other fees.

I’m surprised your estate agents are advising you not to bother. I guess they just want the commission and if you end up having to drop to nearer what you paid for it, it doesn’t make too much difference in what they will get for their percentage. They will just keep persuading you to drop the price until it sells and you will have zero equity, or even into negative.A lease extension will make all the difference, although to be fair there doesn’t seem much reason for such a price hike from what you paid for it vs what you want to sell it for..

anonhop · 07/08/2024 11:35

I also agree re price. I think 'offers over' suggests you're not willing to negotiate + with that lease length I think it's too high.

If it had a long lease & was 'guide price' £230 you might get more interest, but I think a short lease + suggesting you're expecting over that amount is unrealistic (but I'm no expert!!)

FiveShelties · 07/08/2024 11:43

It really depends on how much you want to sell. If you want to sell, then you need to get the lease sorted. I would not touch anything with such a short lease, unless the price was really cheap.

I cannot read your document, but at that price it sounds like that will just be the fees.

nanodyne · 07/08/2024 11:44

Depends on the lease tbh, we bought ours jointly with the downstairs neighbours in our last house and I think it cost us about £5k each (in the Southeast, just outside London). Meant when we sold our place we could list it as "share of freehold". I can't imagine it would cost more than that to extend a lease..?

Gamergirl86 · 07/08/2024 11:51

If you don't sort the lease, the new buyers definitely will and they know that. Together with the slightly high end asking price it's a whole bundle of no.

I would say expect 10k for lease extension. Either way, I think the flat is on for too much and a price of 210k would sort out many of the concerns potential buyers have.

TheGander · 14/08/2024 18:09

Thats probably just the legal fees, without the premium you will have to pay the freeholder. The whole process could not be that cheap. There’s been reforms to the process and I get the feeling people aren’t quite sure how it will all land ( eg lease falling below 80 years should not be such a problem anymore, but even the government’s website indicates higher costs when it does). An 89 year lease really should not be a problem.
I agree there might be other reasons the property isn’t selling quickly.

brightonrock123456789 · 14/08/2024 22:43

It feels like speculate to accumulate in this instance only it takes ages to extend the lease. Must you sell it now?

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