97 years remaining on lease - run a mile?

[MitchT]

Beautiful triplex apartment for sale near me. Know the development well - no cladding issues, great quality build, sensible service charge, etc. Only issue; there's only 97 years remaining on the lease. If I were planning on spending the rest of my life there I wouldn't give it a second thought, but I'm not, it'll be a stepping stone towards my end goal. My concern is that, in five years or so when I'm ready to take the next step, its value will have failed to keep up with the wider market as the diminishing lease erodes its value. It might also make it much harder to sell. It might be possible to extend the lease but the cost would erode my funds for the next move, so that's not a silver bullet either.

I think I've already answered my own question... or am I worrying about nothing?

[davek_964]

Isn't it typically only 99 years to start with anyway? So 2 years doesn't seem particularly significant?

(I've never leased, so could be completely wrong)

[Quhet]

davek_964 said:

Isn't it typically only 99 years to start with anyway? So 2 years doesn't seem particularly significant?

(I've never leased, so could be completely wrong)

My old flat had a 999yr lease when converted.

Have you looked to see how much it would cost to extend the lease OP? Assuming I'd be possible, it could be a few thousand well spent if the rest of the property fits the bill.

[FrankAbagnale]

MitchT said:

Beautiful triplex apartment for sale near me. Know the development well - no cladding issues, great quality build, sensible service charge, etc. Only issue; there's only 97 years remaining on the lease. If I were planning on spending the rest of my life there I wouldn't give it a second thought, but I'm not, it'll be a stepping stone towards my end goal. My concern is that, in five years or so when I'm ready to take the next step, its value will have failed to keep up with the wider market as the diminishing lease erodes its value. It might also make it much harder to sell. It might be possible to extend the lease but the cost would erode my funds for the next move, so that's not a silver bullet either.

I think I've already answered my own question... or am I worrying about nothing?

97 years is fine, and 92 in 5 years time is no problem either.

You may get the odd buyer who's sensitive to it, but generally will be OK.

From memory, some developers only offer 99 year leases on new builds!

[Cow Corner]

If you’re happy with the fundamental principle of leasehold ownership then I’d see no reason why a 97 year lease should be particularly worrisome - it’s above the point at which a mortgage co will have an issue and given the increased rights coming through via the Leasehold Reform Act, which, as I understand it, will simplify the lease extension process, but, as ever, seek your own professional advice.

[Mont Blanc]

Usually, you have the legal right to extend a domestic lease by an additional 90 years once you have lived there for 2 years.

But as others have said, 90+ years wouldn't really worry anyone.

[98elise]

That's fine. 97 or 92 years is the same in value terms.

After 2 years you can extend the lease for a few thousand if you want (there are on line calculators). That's about to change to not having a time constraint, ie you can extend as soon as you own the property.

It only starts to become a problem when you hit 80 years, as marriage value drives the cost of extending the upwards.

[MitchT]

Thanks all so far.

To answer a point raised by a few, this development was 125 years from new (1997). A couple of developments around me are 999 years.

[Antony Moxey]

My business used to be in a leased building - I think originally it was a 125 year lease but we bought it a few years after. We asked if being a lease would affect the ability to secure a mortgage to be told as long as the remaining length of the lease was more than the length of the mortgage it would be fine.

I guess the other thing is realistically how long do you anticipate being there? Pretty much everyone currently alive on the planet will be dead by the time the OP's lease expires so the length of the lease is unlikely to ever be his problem or the problem of the next owner (and more than likely the one after that).

[BobbyA]

Just to add the 2 year rule has been scrapped form today so you are able to apply for a lease extension immediately.

[Rayny]

Two other considerations:
How much is the current ground rent. When, and by how much, is it due to be increased.
If the building is approaching 30 years old - Are there any Section 20 works in the pipeline. Is there a reasonable amount in a sinking fund.