LEASE EXTENSION

[Mr Hanson]

I was recently offered a lease extension for £3k to increase the lease on the top part of a terraced house ( converted into 2 flats) from 79 to 99 years. Does this sound reasonable and how can I find out if the bottom flat has had its lease extended- how does this affect me

Thanks MR H

[Matthew]

The main thing you need to think about is when you will sell. If you are going to sell in about 20 years, then there may be no point, and better to renew then. If you are planning on selling in a few years, then I would probably do it.

All of this will depend on the value of the property which you haven't given us.

For me it does seem to be good value, for example even if your property is only worth £150,000 with a full lease, with a 79 year lease, personally I would be looking for £20,000 off.

My dad was told a few years back that to renew his lease from 30 years to 99 years would cost about £180,000. At the time it was worth about £140,000 - Great value!

Ciao!

[Mr Hanson]

The main thing you need to think about is when you will sell. If you are going to sell in about 20 years, then there may be no point, and better to renew then. If you are planning on selling in a few years, then I would probably do it.

All of this will depend on the value of the property which you haven't given us.

For me it does seem to be good value, for example even if your property is only worth £150,000 with a full lease, with a 79 year lease, personally I would be looking for £20,000 off.

My dad was told a few years back that to renew his lease from 30 years to 99 years would cost about £180,000. At the time it was worth about £140,000 - Great value!

Ciao!

[Mr Hanson]

Matthew

Thanks for the info - value is approx £150k - the £20k drop seemed a bit scary, do you think I would have problems selling the flat with its current lease.

Perhaps I would be better to sell now rather than extend the lease

Cheers

MR H

[Matthew]

It's a difficult one because if you ask people how much it will cost to extend a lease some will say, should cost £5K, but others will say may cost £20K. The fact is whenever I have tried to find out from solicitors etc, there seems no set rule.

The way a purchaser would look at it would be that they are not sure how much it will cost, and would rather over-estimate than under-estimate. Whenever a flat looks really cheap, i.e. £20K or so under-priced you'll nearly always find it's because the lease is under 80 years. If the freeholder is difficult, this process could take years and costs lots of money. If it were me I would either do it or look into buying the freehold.

£3K sounds like a bargain to me.

Interesting to know others views...