|
hornet
Original Poster
5,449 posts
119 months
|
In short, should I be thinking about this? Remaining lease on current place has dipped below 80 years and I'm being advised by various people (some of whom cold called) that I should be seriously considering an extension sooner rather than later. Have no immediate plans to move, but equally, don't want to be in the brown stuff as and when I eventually do. Been reading up on the process, and think I've got my head round it, but just wondered what the PH "expert" opinion was, in a "this does not constitute advice" capacity, of course. Would seem to be a case of do it now for £x, or do it later for more £x and be at the mercy of any potential buyer.
|
|
|
ellroy
2,106 posts
94 months
|
I live in an appartment block, when this came up we as a collective bought the leashold out rather than be open to increasingly extorianate ground rent increases.
Is that an option worth considering?
|
|
|
B16JUS
2,315 posts
106 months
|
Id doesnt matter when you do it the amount just goes higher the longer you wait and its a very open priceing as the freeholder can basically charge what they want and its very hard for you to argue.
Some mortgage companies like to have over a certain number of years left on the lease, personally if your happy just leave it and when you sell use the lease extension as a item with room to negotiate
from 80 years back to 100 or 110 i would say will be approx £9000 - £11000 dependant on the type of flat and number of flats in the block
Also your ground rent will increase a lot too
J
|
|
|
Sarnie
1,861 posts
78 months
|
B16JUS said: Id doesnt matter when you do it the amount just goes higher the longer you wait and its a very open priceing as the freeholder can basically charge what they want and its very hard for you to argue.
Some mortgage companies like to have over a certain number of years left on the lease, personally if your happy just leave it and when you sell use the lease extension as a item with room to negotiate
from 80 years back to 100 or 110 i would say will be approx £9000 - £11000 dependant on the type of flat and number of flats in the block
Also your ground rent will increase a lot too
J How do you know he lives in a flat? 
|
|
|
jdw1234
4,286 posts
84 months
|
Now you have dipped below 80 years "marriage value" is taken into account.
Basically, below 80 years the flat is deemed to be worth more after the lease is extended. This "profit" is to be shared 50/50 with freeholder.
Get it done asap - it shouldn't cost too much at 80 years, but will start getting a lot more expensive a lot from now on in.
For example, I did it on a flat worth £370k with 69 (hehe) years left in Fulham - it cost just shy of £29k including all fees.
|
Advertisement
|
|
|
B16JUS
2,315 posts
106 months
|
Sarnie said: B16JUS said: Id doesnt matter when you do it the amount just goes higher the longer you wait and its a very open priceing as the freeholder can basically charge what they want and its very hard for you to argue.
Some mortgage companies like to have over a certain number of years left on the lease, personally if your happy just leave it and when you sell use the lease extension as a item with room to negotiate
from 80 years back to 100 or 110 i would say will be approx £9000 - £11000 dependant on the type of flat and number of flats in the block
Also your ground rent will increase a lot too
J How do you know he lives in a flat? 50/50 chance of being right and prob more flats leasehold than houses but as they say i could be wrong
|
|
|
hornet
Original Poster
5,449 posts
119 months
|
jdw1234 said: Now you have dipped below 80 years "marriage value" is taken into account.
Basically, below 80 years the flat is deemed to be worth more after the lease is extended. This "profit" is to be shared 50/50 with freeholder.
Get it done asap - it shouldn't cost too much at 80 years, but will start getting a lot more expensive a lot from now on in.
For example, I did it on a flat worth £370k with 69 (hehe) years left in Fulham - it cost just shy of £29k including all fees. This is a "super studio" flat in Watford (the glamour!), so marriage value shouldn't be too excessive. Sadly there weren't enough interested parties in the block to make it a joint effort, so having to go it alone. The estimates I've had come in at about £10k, which obviously isn't going to decrease as time goes on, so like you say, better to get it under way than faff about. Was initially wary, as it wasn't something I knew anything about, but it does appear to be something you can't really put off doing, as you'll only lose out further down the line.
|
|
|
Planet Claire
1,495 posts
78 months
|
This is something I need to sort out on my flat; I think I have about 70 years. Is there a rule-of-thumb guide as to what the cost is, such as x% of value of property. Or does the freeholder have you over a barrel and can set it at any price they choose?
|
|
|
hornet
Original Poster
5,449 posts
119 months
|
Planet Claire said: This is something I need to sort out on my flat; I think I have about 70 years. Is there a rule-of-thumb guide as to what the cost is, such as x% of value of property. Or does the freeholder have you over a barrel and can set it at any price they choose? From what I've read of the stuff I currently have, you (or the people acting on your behalf) will propose a value, which the freeholder will more than likely counter with a higher value. You'll then have a period of negotiation. If no agreement is made (not sure if there's a statutory limit), things go to a valuation tribunal. I also believe your lease period is frozen from the point you serve notice.
|
|
|
jdw1234
4,286 posts
84 months
|
Focus your negotiations on the "relativity percentage" they are using in calculating marriage value.
This is the most sensitive variable in the calculation (assuming less than 80 years left) and is open to interpretation to a certain extent.
I.e. don't be fobbed off by a relativity percentage derived from tribunal decisions relating to property in Mayfair when your flat is in Watford etc.
Take your time to learn the calculation and go through absolutely every number with the freeholder getting them to justify it.
From my experience the freeholder will then get cross you know what you are talking about and then it just reverts to Bazaar style haggling.
You have a tribunal process you can use, but it takes time - i.e. you will probably settle for a bit more than you should if you want to get it done fast.
|
|
|
chris7676
2,255 posts
89 months
|
jdw1234 said: Get it done asap - it shouldn't cost too much at 80 years, but will start getting a lot more expensive a lot from now on in.
For example, I did it on a flat worth £370k with 69 (hehe) years left in Fulham - it cost just shy of £29k including all fees. Holy cow, I have never been keen on the feudal system, shame it's still alive and kicking. Spending that amount on something that doesn't really belong to you even though you have bought it... but at least you own the leasehold and can sell on. I wonder how it can get a lot more expensive - will it not reneder leasehold pointless, unless the leasehold values will reduce accordingly ?
|
|
|
jdw1234
4,286 posts
84 months
|
chris7676 said: jdw1234 said: Get it done asap - it shouldn't cost too much at 80 years, but will start getting a lot more expensive a lot from now on in.
For example, I did it on a flat worth £370k with 69 (hehe) years left in Fulham - it cost just shy of £29k including all fees. Holy cow, I have never been keen on the feudal system, shame it's still alive and kicking. Spending that amount on something that doesn't really belong to you even though you have bought it... but at least you own the leasehold and can sell on. I wonder how it can get a lot more expensive - will it not reneder leasehold pointless, unless the leasehold values will reduce accordingly ? I mean it will get much more expensive as the lease goes from 80 years left to zero years left as the marriage value (difference in perceived value of flat before and after lease is extended) increases significantly. 50% of the marriage value is included in the premium to extend (i.e. you share the "profit" with the freeholder). With a lease over 80 years, there is deemed to be no marriage value (i.e. flat worth the same before and after extension so no "profit" to share). This is why you should always extend at over 80 years or ASAP if under 80 years.
|
|
|
Liamsaid
33 posts
41 months
|
I'm in the same boat, even down to it being a super studio in Watford. Your story sounds like you might be in the same area, is it in the North of Watford by any chance, and did you go to a presentation above a nearby pub late last year with a company who provide leasehold extension services by any chance?
I've had the valuations visit and have signed up to the paperwork with them.
Its something I had in mind to do anyway when this company made themselves known. A mate of mine did his own extension last year and its a long boring process, so I'm happy to be using a management company. I did a bit of goggling about them and its pretty positive.
|
|
|
Du1point8
14,256 posts
61 months
|
jdw1234 said: Now you have dipped below 80 years "marriage value" is taken into account.
Basically, below 80 years the flat is deemed to be worth more after the lease is extended. This "profit" is to be shared 50/50 with freeholder.
Get it done asap - it shouldn't cost too much at 80 years, but will start getting a lot more expensive a lot from now on in.
For example, I did it on a flat worth £370k with 69 (hehe) years left in Fulham - it cost just shy of £29k including all fees. Wow... I did mine that was at 74 and worth £330k and it cost just short of £13k after all fees... When the freeholder told me the price I almost ripped his f  king arm off to sort it.
|
|
|
London GT3
442 posts
110 months
|
I don't think it has been mentioned here but your entitlement at law is to a 90 year reversionary lease i.e. a 90 year extension to the existing lease. I believe the rent has to be a peppercorn. You can apply to the Lands Tribunal for adjudication but costs and hassle normally dictate that the freeholder and leaseholder sort things out.
I own a freehold of a block of flats with 99 year leases from 1969. I have been getting £14,000 for lease extensions. The value of the flats is about £170k for a 2 bed.
Hope this helps
|
|
|
hornet
Original Poster
5,449 posts
119 months
|
Liamsaid said: I'm in the same boat, even down to it being a super studio in Watford. Your story sounds like you might be in the same area, is it in the North of Watford by any chance, and did you go to a presentation above a nearby pub late last year with a company who provide leasehold extension services by any chance?
I've had the valuations visit and have signed up to the paperwork with them.
Its something I had in mind to do anyway when this company made themselves known. A mate of mine did his own extension last year and its a long boring process, so I'm happy to be using a management company. I did a bit of goggling about them and its pretty positive. I didn't attend the presentation, but have been talking to the people involved - initials LS? I suspect we're neighbours. Is your freeholder SGIK by any chance? Was a bit cynical at first, as the approach seemed rather speculative, but having read up on things since then, it's obviously something that needs attending to, hence this thread, so I'm going to contact them to go ahead. I'll ping you a mail, as could be useful to get in touch?
|
|
|
Alpinestars
649 posts
113 months
|
I took my landlord to the LV Tribunal after protracted negotiations We were miles apart on valuation. I did all the calculations etc and represented myself. Won hands down. Give me a shout if you want an approx valuation or any other help.
|
|
