Extending a lease on a flat

[Beckiboo]

I'd like to pick the brains of the Spotlight massive again!

I'm looking to buy my first flat this summer. We've found one that we like, however the lease is only 82 years. I know that if it drops below 80 years it can cost quite a lot to increase the lease.

One way we've been told of getting around this is to ask the current owners to apply for the least, the "start the ball rolling", then we move in and continue the application ourselves.
On paper this sounds pretty straightforward... but I'm always worried about all this legal stuff, what if something goes wrong!

Has anyone got any experience with buying a flat / extending the lease?

Any advice appreciated

 

[Robder]

That's the first time I've been told 80 years is fine - I always thought 100 was the safest bet.

I'd tread carefully here Becks.

I know it's hard when you fall for a place but make sure everything's in order. Extending a lease can cost '000s.

 

[Robbie G]

You are right to extend it sooner rather than later. If it drops below 80 year the price goes up drastically, as you have to pay a marriage fee to the Freeholder for the loss of earnings from not getting the lease back when he was expecting it.

Normally you only have the right to extend it once you are in the flat for 2 years, but if the people in the flat now are willing to start the ball rolling for you, you should be able to do it.

Have you spoken to a Solicitor about it?

From the Shelter website

Is it important to check the lease before buying?

Yes. If you are buying a leasehold property and there is a problem with the lease, it should be sorted out before contracts are exchanged. This might mean that the seller has to extend the lease, or sort out a dispute about repairs with the freeholder (or other leaseholders in the building). This could delay the sale but may be easier than dealing with the problems after you move in.

 

[Robbie G]

That's the first time I've been told 80 years is fine - I always thought 100 was the safest bet.

I'd tread carefully here Becks.

I know it's hard when you fall for a place but make sure everything's in order. Extending a lease can cost '000s.

80 years is fine on a lease, its only when it gets to below 70 you have to worry. As Mortgage companys are less likely to lend you money to buy them.

I have 63 years on my lease and a absentee Freeholder that has just been found! I am in the process of trying to buy the Freehold back if I can!

 

[Beckiboo]

It all sounds like SUCH a headache!!

We've just put an offer in on the flat only to be told suddenly there's a new offer on the table now higher than ours (despite us being told before there was only one other offer, lower than ours).
I f*cking hate estate agents! How would we know if this other offer exists or if they're just trying to squeeze more money out of us?

Honestly it makes me just want to stay renting...

 

[Robder]

I feel your pain - there's no such thing as a smooth transaction where estate agents are concerned.

I know you're emotionally involved but remain calm when talking to the sharks - keep your business head on. Make sure you know your limits and stick to them - also make it easy for yourself (have a mortgage offer ready so you look more desirable and can move quickly).

They make you feel like they're working for you and then play you off against others - or worse make up fictitious stories. Ugh. Scum.

Hope it goes well! x

 

[Robbie G]

It all sounds like SUCH a headache!!

We've just put an offer in on the flat only to be told suddenly there's a new offer on the table now higher than ours (despite us being told before there was only one other offer, lower than ours).
I f*cking hate estate agents! How would we know if this other offer exists or if they're just trying to squeeze more money out of us?

Honestly it makes me just want to stay renting...

It is a headache. But thats the joys of buying leasehold!

There in no way to know if you are being taken for a ride or not. It depends on how much you want the flat. Id offer say 1k more then say thats it then make sure they know what a good position you are in. You have no chain to worry about and you have the mortgage sorted and see what happens.

 

[utagaura]

I'm not adding anything helpful to this thread, but just curious... how can you have a lease if you're buying it? I've never heard of this in Canada.... are you saying if you buy it and you live another 82 years, your lease is up??

 

[Robbie G]

I'm not adding anything helpful to this thread, but just curious... how can you have a lease if you're buying it? I've never heard of this in Canada.... are you saying if you buy it and you live another 82 years, your lease is up??

In England we have Freehold and Leasehold properties. If you buy a freehold the house of flat is yours 100%

Leasehold you basically buy the property but you don't own the land its built on so you have a lease on the land for 99 years for example and pay the Freeholder ground rent. After 99 years the whole property goes back to the people you are leasing it from.

There are laws in place now to stop you losing your house. So after living in a house for 2 years you have the right to extend your lease at a price agreed with the freeholder.

 

[utagaura]

In England we have Freehold and Leasehold properties. If you buy a freehold the house of flat is yours 100%

Leasehold you basically buy the property but you don't own the land its built on so you have a lease on the land for 99 years for example and pay the Freeholder ground rent. After 99 years the whole property goes back to the people you are leasing it from.

reallly!!..... well learn something new every day I guess!

 

[Robbie G]

reallly!!..... well learn something new every day I guess!

Yep apparently according to a fella i know people used to buy the freeholds of properties and hold them in a trust as an investment for their kids before the law changed in 92 or something.

 

[utagaura]

Yep apparently according to a fella i know people used to buy the freeholds of properties and hold them in a trust as an investment for their kids before the law changed in 92 or something.

so I guess most people buy leasehold then ? ( sorry to distract from your question becki..)

 

[Robbie G]

so I guess most people buy leasehold then ? ( sorry to distract from your question becki..)

Well flats tend to be Leasehold and Houses Freehold but there is some crossover.

 

[Philly Cent]

There's been quite alot of ammendments to this legislation recently, 80 years is a v important number, as an owner with 80 years unexperired, you can serve notice to yr freeholder inwriting that you wish to extend yr lease, and they cannot charge you marriage value, however can charge you an admin fee, which is basically solicitors fees, which would be circa £1k!
Should you have 79 years, 364 days on the lease, you can serve notice in the same way, and they can charge you marriage value, as a premium. That is calculating the difference in value from the existing lease, and what it be worth with a 90 year extension, which is the no of years they are sold in, which would probably be 15/20% of the value!
Be aware of this, ac be expensive & really affect the saleability!
Lenders like a minimum of 75 years unexpired, as they like 50 years left unexpired at the end of the term of the Lease, which is typically 25 years! Most will lend of leases under, however the rates & terms vary, and you may only be able to borrow over a shorter period!
It requires specialist advice, most Solicitors dont have the awareness of how this legislation has changed!

 

[russ]

our place had quite a short lease(bout 70 yrs)when we bought it. We had our solicitor sort out a lease extension whilst doing the purchase work.
Extending the lease to 125 yrs cost (i think)about 4% of the purchase price.

 

[Buckley]

It all sounds like SUCH a headache!!

We've just put an offer in on the flat only to be told suddenly there's a new offer on the table now higher than ours (despite us being told before there was only one other offer, lower than ours).
I f*cking hate estate agents! How would we know if this other offer exists or if they're just trying to squeeze more money out of us?

Bung the agent Becks. He personally will be getting 1.5% max of the difference between you and the other buyer. For every grand extra he sells for he gains £15. You give him £200 and that's the equivalent of him selling for another £13k. He puts off the other buyers you get you flat and he gets to move onto the next sale.

 

[Buckley]

Have you bought somewhere now Becki

 

[discoplayer]

im in the process of looking to buy here in melbs....
its a nitemare.... i SOOOO feel your pain babe!
have you found somewhere yet??

 

[fatphilb]

reallly!!..... Well learn something new every day i guess!

+1

Had never heard of this malarkey until now!

 

[Olly]

theoretically looking to buy a cheap 1bed next year in some arse end of town, because I'm sick of sharing rented flats (15+ years now) but does it just bring on a whole load of new pressures? Renting = no hassle with stuff the landlord can sort out, limited responsibility + flexibility about moving out and I enjoy that freedom - just not sure I'm ready to be at the mercy of what seems to be an unstable market...