LEASE EXT OR BUY FREEHOLD

[Kent Boy]

I tried selling my flat back in March (it is the top floor of a converted terraced house) and as it only had 79 years left on the lease I approached the freeholder to extend for 50 years. He came back and agreed £5.3k based on 3.16% of the property value at that time£158k. ( Note the valuation was based on some local estate agents estimates and he stated it was private to me and valid till September 2008)

The whole process fell flat due to solicitors/ buyer dropping out etc

Would this still be a reasonable quote giving the time that has elapsed ( i.e lease is now 6 months shorter albeit property values lower ) or would a potential freehold purchase be a better option if I can get the Flat downstairs to participate.

So far all his agreement was based on an exchange of letters and him asking me to set up a contract for confirmation of the extension. He had not intended on getting solicitors involved at his end.

Thanks in advance

[Simon Dewsberry]

If price is based on % of prop val ..then i would be renegotiating rice on fresh valuation ....(3x not 1 local agent!)

The Rodent

[Kent Boy]

If price is based on % of prop val ..then i would be renegotiating rice on fresh valuation ....(3x not 1 local agent!)

The Rodent

thanks but would a freehold purchase be an option and how is this calculated

[Preston]

Hi,

Freehold valuation is a bit of a black art, but there is some good information on the subject on the lease-advice.org website. Essentially, they take three things into accout:

1) income for freeholder - principally ground rent but there are occasionally other things

2) reversion value - this relates to how long the lease has left to run.

3) marriage value - the theoretical incraese in value brought about by combining the freehold with the leasehold.

I'm looking at trying to buy a freehold at present, so would be interested to know if you pursue the matter.

Preston