Leases and demolitions

[BumblingBanana]

Slightly complicated.

DM owns a flat with a 80 year lease left. She has mentioned in the past that the council were interested in the plot of land. In her mind, I think she has an idea that, if they wanted to demolish them, she could get a good chunk of money to sell the plot to developers.

Context being, this happened to our neighbours in the 90s. DM and DF divorced. Sold the home. The following year or so, developers got interested. Our old neighbour, and new owner of our old family home, sold the houses to the developers, for much larger sums than my parents sold for. Knocked them down and built flats. So, slightly bitter!

She doesn't know what she is doing with the current flat. In her heart she wants to move somewhere else. If she did this, would it be better to do it sooner? What problems could arise about this lease and the council wanting to demolish the flats if she waits? Could she end up with a flat she can't sell, and lose money if she wants to leave?

I absolutely won't be able to convince her to just extend the lease as she has 70k cash savings, basic state pension, and is adamant about wanting to build her savings (she still works part time as a carer).

I also can't listen to her moaning about where she lives and the choices she has made until the end of her days.

How old is she?
Not sure the tendency to moan can be cured by circumstances, it tends to have ossified into a habit over the years and even good fortune can't eradicate it, so don't get your hopes up. Concentrate on the practical issues.
Do YOU think she would benefit from moving? Is the flat unsuitable as she ages for instance?

As the flat is leasehold she isn’t entitled to much more than the value of the flat as her flat would revert to the Freeholder in 80 years, unless the potential developers want to pay her to move. She doesn’t own the plot, unless there is a shared freehold. With 80 year remaining on the lease her flat is reducing in value and to extend the lease, would be getting increasingly expensive.
The experience with the family home is clouding her judgement I guess.

Ooohhh, OP. Tricky as she has her eyes on the prize!

Somehow (and this might be impossible), she needs to come around to understanding that what happened to her former neighbours almost half a century ago is the kind of windfall that happens once in a blue moon. It's like winning the lottery, not something you can base real-estate/home decisions on.

I don't know how old she is, but the healthier perspective is not to focus on potential profits to be made, but quality of life going forward. You say that in her heart she'd rather live elseewhere, so why wait? Life is short, and sometimes shorter than we think. And moving house is a pain in the arse, but doable, and with careful planning can vastly enhance our lives (I speak as someone who has done it rashly a few times in the past, but am now ecstatic to have finally got it right).

Can you get her to focus on where she would like to go? There are a lot of important decisions to be made.

Ha haaaa thank you so much for this comment about the tendency to be a moany bat. You are right actually.

I was thinking about that after I posted. The flat is highly practical actually, as its ground floor and has large doorways so heaven forbid she needed to use a wheelchair or have any adaptations made that would be possible.

She is 76.

I don't imagine in this economic climate there would be much desire for developers to pay extra. The 90s was a different era and this flat is in a very different location.

She does hold onto the past.

This made me chuckle as she fantasises about winning the premium bonds as if it's an actual life plan!

That is very sage advice about quality of life, and to that I would say that she, on one hand, takes good care of her health. She eats well and is quite active and keeps mentally stimulated. But for the love of god also won't quit smoking.

I can't get her to focus on that, no. And I am scared to make the decision for her. Essentially though, we live in an expensive area of the country.

So, she would either be looking at somewhere smaller (as we also have the lease problem that will need to be paid) which is not really going to entice her.

Or she moves further away. We could possibly look at a seaside town that isn't a million miles away.

It is just hard because, she didn't grow up in this country. She doesn't really have the same affinity for this area that I do, I love it with my heart. She wouldn't really feel any connection to a different area. The property would need to offer something special I think. And for that would probably be at least an hour away from us (me and DB) children. Currently we are 20 mins away. I just don't think she would want that.

The only other place is the south west, where she has a cousin, which is a couple of hundred miles away. That would free up cash so she could retire more comfortably.

I can recommend the SW! 🤩

She's 76, so although she might well live another couple of decades or so, her energy for things will decline. It's really important for her to find somewhere she can live contentedly, as external activities are likely to become more difficult as the years pass. It's a shame she doesn't feel attached to your area (and perhaps it's outside her budget anyway), but see if you can get her interested in some filtered RightMove searches to give her a better idea of her options. I hope she finds a place that interests her.

Downsizing at her age is actually a big plus, if she finds the right place.

She needs to think about what makes her happy. That might be a difficult question for her to answer, especially if she is just used to being crabby 😄

This is actually a bit mad. She doesn’t own the land, so would never benefit from selling it. More likely the council / freeholder would do a compulsory purchase for a lower than market rate and sell it to the developers and make the money. So she’d actually be worse off. I’d be worried living in a flat I thought was going to get developed as very likely would end up worse off!

She said but darling there will be other people in the same position as me (its a small block of flats).

She won't really discuss anything.

Yes, the council can just compulsory purchase the whole building… I’m sorry, this sounds maddening!

DM owns a flat with a 80 year lease left.
🚩🚩🚩
Have a read of this from MSE

Thanks for the comments. I found a .gov page that explained that compensation is done with the aim of 'being no better or worse off' so would be market value, plus a 10% home loss payment (I.e. 10% of value of property).

If anything needs to be contested then there are legal fees which are only recoverable if the CPO is negated I.e. if you win.

So that's a bit clearer.

Will try and pass the info on.

That link didn't work. Try
https://www.moneysavingexpert.com/mortgages/extend-your-lease/

I know the risks. It becomes hard to get a mortgage on it if sold etc.

Costs of lease extensions are under review to make them cheaper to do but the reforms have been delayed. I think it may be picked up again in 2026 by government. I think they will have to be reformed at some point as they are ludicrously costly.

At the moment under 80 years means there is a costly marriage value payment that the reforms will likely scrap.

I don't actually know the exact lease length currently, but I'm fairly sure DM won't part with a penny before she has to.

Thank you.

The short lease will devalue the
sound's like it would be compulsory purchased unlikely to get a high offer