Should I be worried about future lease extension costs - 94 years left

[IWillAlwaysBeinaClubWithYouin1973]

Leasehold house (shared ownership). Remaning lease is 94 years so I am thinking in 5 years or so I would need to apply for the extension otherwise it will affect resale value. Costs seem to be around £6k at the moment, maybe more, and as its shared ownership it won't benefit from any of the leasehold reforms.

I'd need to save up to do this, so lets say I live there 6-7 years I'd need to save £1k a year towards this cost. Am I overthinking it worrying about lease at this early stage?

(PS don't want to debate the pros and cons of shared ownership in general, just the lease issue)

I don’t know if you’re overthinking it because I’m in a similar position. I have to live here for at least 2 years before getting a lease extension, which would mean next January onwards. The earlier you do it, the cheaper it is. So I am tempted to work towards doing it asap if I can.

@WhisperingJesse thanks for reply - isn't it 85 years it starts to become a real issue? I've heard a lot of people are waiting for the leasehold reforms - would that help you?

The leasehold reforms have already been agreed, but the legislation to make them atcionable isn't quite in place. But it does mean that the old issue of leases shorter than 80 years (known as 'marriage value' for some reason) won't be an issue. And extending leases is set to become cheaper.

@Tonissister which is of course a really good thing, and I hope this will help @WhisperingJesse, but I am 99% sure none of the new legislation will apply to shared ownership leases. Most new build leases now are 999 years, but the particular house I am looking at is whats called an older style lease which was only 99 years to begin with. And there's still a cost involved either way - do people just go oh well and absorb the cost somehow?

If you've not bought it yet I'd avoid it all together

This. If you really do go the shared ownership route (and in my view it’s not a great way to get on the property ladder) then look for a much longer lease, at least 125 years, preferably more. It will make it easier to sell, although it won’t be easy anyway, because you have to deal with the housing association and agree the price. Shared ownership and a short lease isn’t a good combination.

What about the legal costs of extending? If the premium is £5,000 say, you should budget for an average of £5,000 legal costs as you pay the landlords costs as well as your own. Might come out cheaper but might not.

I’m also not sure if new legislation will cover shared ownership.

in any case I don’t see LAFRA coming in any time soon as I think the current govt will collapse and it’s one of those issues that keeps been kicked down the road.

I think, but do check, that they got rid of having to wait two years now.

I've done a lease extension fairly recently. I know new legislation is coming but it's been promised for a long time and no sign of it just yet. I'd inherited the property and estate agents basically said it would be very difficult to sell at a good price - that was with a 91 year lease.

The calculators are helpful but aren't definitive, you are broadly at the whim of the freeholders. The cost was roughly double what the calculator suggested at over £10k plus legal costs of the freeholders. And it took ages to be registered with land registry .

It's a terrible system.

If you've not bought yet, I'd avoid

yeah its depressing, I really need shared ownership otherwise all I'll get is a small leasehold flat and I really thought this was "the one". Its under the old scheme so had a 99 year lease to begin with; makes me wonder as there are many "old scheme" shared ownership houses and I wonder if they will all get caught in this?

Just agreeing with everyone here; interesting to hear what happened to @RaphaelDidIt and yes, the calculators seem hit and miss. I agree that the leasehold reform stuff may well fail to get implemented yet again within this parliament.

Was the 2 year rule for shared ownerships or any leasehold whatsoever?

I bought a shared ownership resale, so it started with a 125 year lease from 2015, so 114 or so years left currently.

It’s all very well people suggesting S/O be avoided but when you get divorced in your late 50s and there isn’t enough equity in the former marital home to purchase outright, sometimes it’s literally the only option. I hope to stay here ‘forever’ (I’ll be 62 this year) but the earlier I buy a lease extension presumably the cheaper it is, to secure my equity if I do ever have to sell.

The solicitors’ report said I do have to wait two years, so presumably that stands. That time will be up at the end of this year. And I can’t afford to do anything about it until I finally do get a lump sum out of my STBX so there’s no hurry right now.

@IWillAlwaysBeinaClubWithYouin1973My legal information says below 80 years really affects the value so to seek to extend once it’s got to 90 years or less if possible.

2 year rule for all abolished I think.

@WhisperingJesse I am in very similar circumstances and same age! Can I ask if you are going to staircase or just continue to pay rent?

Looks like the law is going to change on leasehold ... I'd not do anything just yet

@ByQuaintAzureWasp pretty sure almost all of the new provisions dont apply to shared ownership unfortunately.

I’m very likely to leave it at a 25% share and put any lump sum into paying off the mortgage and any spare into my pension. I haven’t yet done a full analysis but I think it will make more financial sense.

Update: just coming back to see if I can get more advice because I now find out that the housing association involved (I assume they are the freeholder?) want to sell many of their freeholds to someone else - maybe another housing association, maybe not? They don't see why they should give me any information or why I am asking for it. Is it a genuine worry that your freehold might be sold on, or am I just making it very complicated? What if the new freeholder (just not sure that;s the right word) doesnt want to let me extend my lease or charges me an extortionate amount?