thesaint sfc Posted 28 October, 2010 Share Posted 28 October, 2010 I've just bought a leasehold maisonette which has a 69 year lease left on it. Bit of an unusual lease as it's self maintaining so I don't have any maintenance costs going out. I've had a couple of surveyors have a look at the property and they've both said that to re-new the lease it should cost me about 10k with no further ground rent to pay (£25 a year.) I've had my solicitor contact the landlord prior to the purchase and he has said that he would want 25k for a 30 year extension. I appreciate I'd need to take him to a tribunal and come to some sort of agreement (after living in the property for a year) - but has anyone else ever been in this situation before? If I can't get the lease down to 10k, I'm not too fussed as I would just rent the property out and live off of the rent as I've got it for a very good price. Link to comment Share on other sites More sharing options...
Thedelldays Posted 28 October, 2010 Share Posted 28 October, 2010 I think that price is illegal.. I am sure by law a lease is can only be worth so much.. however, I am probably talking ****e... Link to comment Share on other sites More sharing options...
Smirking_Saint Posted 28 October, 2010 Share Posted 28 October, 2010 (edited) Seems very similar to the maisonette i bought a few years back, i bought the lease from about 70 years to 99 at a cost of about 9k. From what i have been told, if the lease is over 85 years then you can inform a solicitor to carry out the administration of updating the lease at a minimal cost of 500 quid. Once the lease drops below 85 years the holding company will pretty much have you by the short and curlys, and you pretty much have to pay what they see fit. Many mortgage companies won't actually touch a leasehold property with a lease below about 75 years so you have done pretty well, unless they have informed you that you need to renew the lease as part of the contract ? What is the holding company called ? If the solicitor has said you may be able to take them to a tribunal then fair enough, 25k is a bit excessive, which is probably what made the price so good in the first place. Forgot a bit - Oh yeah, and also my ground rent went from £25 pa to £200 pa after i extended the lease. Edited 28 October, 2010 by Smirking_Saint ground rent Link to comment Share on other sites More sharing options...
Jimmy Gabriel's Halo Posted 28 October, 2010 Share Posted 28 October, 2010 As a piece of general advice do not buy any leasehold property with under about 75 years left on the lease and if you do get the lease extended as soon as you can. The closer it gets to 60 years the more the freeholder has you over a barrel and the more it will cost you. I did a valuation on a flat here in Worthing last summer with only 57 years left on the lease and the freeholder wanted £20,000 to renew. There are literally thousands of flats on the market right now many of which will never sell because of the low number of years left on the lease. Under 60 years is unacceptable to all lenders and will be unmortgagable. The going rate in Sussex right now is anything between £10K and £20K depending how many years are left on the lease. And then you will also get whacked for a much higher Ground Rent - a £50 pa GR can easily rise to £250 pa - unless you have owned the property for a certain number of years. So to thesaint sfc get some proper advice from a Chartered Surveyor who specialises in leasehold renewals and a good solicitor to act for you. Bl00dy good luck mate. Link to comment Share on other sites More sharing options...
thesaint sfc Posted 29 October, 2010 Author Share Posted 29 October, 2010 I've cash bought the property. Ive been told that he can charge me whatever he likes until I've been living there for a year - at that point I can demand that i want the lease renewed and if I'm unhappy with what payment he wants I can go to a tribunal and get it sorted out by way of his surveyor saying why he thinks it's worth 25k and my surveyor saying why he thinks it's only worth 10k. Link to comment Share on other sites More sharing options...
SO16_Saint Posted 29 October, 2010 Share Posted 29 October, 2010 Thesaint: regardless of whether you bought the property cash or not, the short lease may make it unsaleable in the future if you don't extend the lease as it may become unmortgageable. Play hardball certainly but get it done if you have any aspirations of selling it in the future Link to comment Share on other sites More sharing options...
thesaint sfc Posted 29 October, 2010 Author Share Posted 29 October, 2010 I fully intend to - and at 10k I would be quite happy to now - but I understand I have to live there for a year before I can negotiate with the landlord - until then he can charge me whatever he likes. What a crazy country we live in! Link to comment Share on other sites More sharing options...
SO16_Saint Posted 29 October, 2010 Share Posted 29 October, 2010 I fully intend to - and at 10k I would be quite happy to now - but I understand I have to live there for a year before I can negotiate with the landlord - until then he can charge me whatever he likes. What a crazy country we live in! I know it's crazy Link to comment Share on other sites More sharing options...
Smirking_Saint Posted 29 October, 2010 Share Posted 29 October, 2010 I know it's crazy Its not really that crazy, to be fair, he 'owns' the ground the house is built on. Link to comment Share on other sites More sharing options...
SO16_Saint Posted 29 October, 2010 Share Posted 29 October, 2010 but it doesnt cost £30,000 to extend a lease does it Link to comment Share on other sites More sharing options...
Smirking_Saint Posted 29 October, 2010 Share Posted 29 October, 2010 but it doesnt cost £30,000 to extend a lease does it No, but then it is worth what the leaseholder wants for it unfortunately, it is a sh*tty situation i know. Link to comment Share on other sites More sharing options...
SO16_Saint Posted 29 October, 2010 Share Posted 29 October, 2010 it is - but Caveat Emptor comes into play with Leasehold properties more than ever! Link to comment Share on other sites More sharing options...
thesaint sfc Posted 29 October, 2010 Author Share Posted 29 October, 2010 All of you seem clued up on the matter - but you haven't mentioned the tribunal! Am I right that if he says he wants 25k he has to prove why? The surveyor said that they've got a complicated calculation they make to determine what the lease is worth - same for all surveyors so the cost of extending it should never be very different from surveyor to surveyor. I'm sure I've got a battle ahead of me - but I'd like to know how things lie now so I can decide if I want to try and extend it, or wait and see if legislation changes. It's the most rentable property I've ever seen - so I'm not even planning on selling it - I'd quite happily keep hold of it and rent it out and cash in on that. Link to comment Share on other sites More sharing options...
thesaint sfc Posted 29 October, 2010 Author Share Posted 29 October, 2010 FWIW, it's a 3 bedroom maisonette with a 20ft lounge, a 20ft kitchen, a cellar, a very large bathroom, parking permit and its a very short walk to the train station - which cannot be heard from the house. I've already secured two people renting the rooms out for £400 each a month. I've cash bought it for £123k. There's some work that needs doing to the roof which is going to cost me about 8k. It's in a very nice area too. I knew as soon as I got involved I was taking a gamble with the lease, but due to the good price, location and it being such a nice property I decided to go for it. You can't buy a 1 bedroom flat for Link to comment Share on other sites More sharing options...
Liquidshokk Posted 29 October, 2010 Share Posted 29 October, 2010 I'm going through the process of extending our lease by 90 years. We were given two offers; 8000 + 750 costs and 250 pa ground rent (currently 25) or 9500 + 750 costs and no ground rent. After looking at the various calculators available online the average cost came out at 12k so we consider the 9500 offer acceptable. The property does only have 59 years left on it afterall. I think it is criminal what your freeholder is proposing!! Get online and check the calculators. If you go to the tribunal it could actually come out as a lot more than 25k as you will have heavy court costs and if the freeholder wins he may well increase it even more (spite?) Plenty of stories online where people have gone through the shoddy process with varying outcomes. Good luck! Hope you got the place dirt cheap and the ridiculous costs of doing this don't make it turn out a bad deal as in many cases.... (just seen your last post and seems you got a good price, Phew!) Link to comment Share on other sites More sharing options...
thesaint sfc Posted 29 October, 2010 Author Share Posted 29 October, 2010 Thanks Liquid - I spoke to a leasehold hotline (it shows how bad it is that one exists!) and they informed me that the costs of the tribunal are currently covered by the government. I imagine there would be a fee for the solicitor to pay. Could you recommend any websites to me? I think that the difference between our situations is that your landlord is not a f*cker who doesn't care if he's destroying peoples lives! I'd absolutely love to get one over on him. The fact the property is a repossession suggests to me that perhaps it was repossessed because of him and his crazy lease price. Link to comment Share on other sites More sharing options...
Liquidshokk Posted 29 October, 2010 Share Posted 29 October, 2010 No worries, The most informative site was http://www.lease-advice.org/ but I'm guessing you've seen that. Most of the examples I read were on the MoneySavingExpert website. These are the links to the online calculators we used and the varying prices we were given; http://www.lease-advice.org/calc/Default.aspx Total premium = £14,000 ----------------------------------------- http://www.tenancy-agreements.co.uk/lease.php Total premium = £11,473 ----------------------------------------- http://www.canonburymanagement.co.uk/Web/Lease-Extension-Calculator-LeaseResults.aspx?ID=1016180 Total premium = £13,968 Just be careful of all the extra costs. If you want the place surveyed (required if you want to make a counter offer) that will cost approx 300 + VAT just for the survey + extra (unknown) cost to actually negotiate the counter off for you. Theres also the solicitor fees of at least 750 x2 (Yours and their fees) Link to comment Share on other sites More sharing options...
Scummer Posted 29 October, 2010 Share Posted 29 October, 2010 Seems I got quite lucky with a flat I bought a few years ago. It was a conversion of an old building into 4 flats. We had a 125 year lease but bought it off the developer for £6k between the 4 flats. Link to comment Share on other sites More sharing options...
thesaint sfc Posted 29 October, 2010 Author Share Posted 29 October, 2010 Liquid - you're a true gent. Thanks for that - I'll fill it all in this evening. Certainly won't be buying leasehold again! This will either work out well and I'll make a tidy sum, or it will be a mess and I'll end up walking away without making any money. Link to comment Share on other sites More sharing options...
thesaint sfc Posted 29 October, 2010 Author Share Posted 29 October, 2010 Seems I got quite lucky with a flat I bought a few years ago. It was a conversion of an old building into 4 flats. We had a 125 year lease but bought it off the developer for £6k between the 4 flats. It's odd - some people don't seem to have the time of day for lease's. In my situation for instance my landlord would collect £25 a year from me - not exactly going to pay his mortgage is it! I can understand if they have maintenance going in - but even then if the roof needs repairing or something they can end up having a lot of work to do. They also have stacks of paperwork to deal with. Link to comment Share on other sites More sharing options...
Liquidshokk Posted 29 October, 2010 Share Posted 29 October, 2010 Liquid - you're a true gent. Thanks for that - I'll fill it all in this evening. Certainly won't be buying leasehold again! This will either work out well and I'll make a tidy sum, or it will be a mess and I'll end up walking away without making any money. It's odd - some people don't seem to have the time of day for lease's. In my situation for instance my landlord would collect £25 a year from me - not exactly going to pay his mortgage is it! I can understand if they have maintenance going in - but even then if the roof needs repairing or something they can end up having a lot of work to do. They also have stacks of paperwork to deal with. Not a problem, if I can help any more let me know. Its worth mentioning that extending the lease "should" massively increase the value of the property so you should be alright depending on what the ceiling price is for such a property as yours. Believe me I have muttered the words "I am NEVER buying a flat again" many many a time. The freeholder is only getting 25 quid a year because that formed part of the deal the last time some poor sod had to pay him 10k to extend the lease... which wouldnt have been all that many years ago really... although leases are for 90+ years the freeholder gets a big payout as soon as it drops below 80 normally, as most people dont let it drop lower because of the marriage value cr@p. So they certainly do well out of it. Especially in cases like mine where there are around 20 flats in the building! Nice little earner. Link to comment Share on other sites More sharing options...
bridge too far Posted 29 October, 2010 Share Posted 29 October, 2010 It's odd - some people don't seem to have the time of day for lease's. In my situation for instance my landlord would collect £25 a year from me - not exactly going to pay his mortgage is it! I can understand if they have maintenance going in - but even then if the roof needs repairing or something they can end up having a lot of work to do. They also have stacks of paperwork to deal with. That's a bit disconcerting. I think you said in the opening post that your flat was 'self-maintained'? Surely that means that all of you who own flats in the building are also responsible for repair and maintenance of the common areas, including the roof. Have you set up a management company with the other leaseholders to cover such instances? Having been stung in the past by being a leaseholder, I would now be very wary of such an arrangement. But I'm sure there are others on here who are far more qualified to comment. It might be worth checking it out. Link to comment Share on other sites More sharing options...
thesaint sfc Posted 29 October, 2010 Author Share Posted 29 October, 2010 It's above an Estate Agents - there is nothing else. I own about 90% of the property, Fox & Sons own a small shop underneath. In the lease it states that the Landlord is responsible to pay 50% of costs to repair the roof - bit odd in a self maintaining property - so I'll be dropping him a letter about that once I'm in and settled. I might also see if we can come to a deal with the lease if I pay for the repair of the roof or something along those lines. I'd ideally like to become really good friends with a chartered surveyor and then I think I'll be alright! Link to comment Share on other sites More sharing options...
Jimmy Gabriel's Halo Posted 29 October, 2010 Share Posted 29 October, 2010 I'd ideally like to become really good friends with a chartered surveyor and then I think I'll be alright! You'll be lucky, nobody likes us, we don't have friends...... Link to comment Share on other sites More sharing options...
Whitey Grandad Posted 29 October, 2010 Share Posted 29 October, 2010 Don't forget that VAT goes up to 20% on 4th January. Link to comment Share on other sites More sharing options...
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