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98 year leasehold?


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Hi all,

 

I'm in the process of researching a deal. I think I have found a really good one with the only issue being the lease has 98 years left on it (126 years from 1990). Now being a podcast listener , I've heard from Rob and Rob that I should be looking for at least 100 years. RMP even state they look for 125 on their fundamentals screening.

 

What do people think? Is this a deal breaker? How easy would it be to extend the lease and how do i go about enquiring?

 

Thanks in advance.

 

Bob

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On 18/10/2017 at 3:45 PM, bobm84 said:

Hi Bob

im in the same situation. I am interested to hear how it goes. Currently I am in two minds about the deal. I have inquired about extending the lease but have not had a reply yet. 

Best wishes

Jayne. 

 

 

Hi all,

 

I'm in the process of researching a deal. I think I have found a really good one with the only issue being the lease has 98 years left on it (126 years from 1990). Now being a podcast listener , I've heard from Rob and Rob that I should be looking for at least 100 years. RMP even state they look for 125 on their

 

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Hello I extended my lease on a flat in London SE24. It cost me 13000 including solicitor fees this was with a private freeholder.  My advice is, if the  lease is with a local authority, council, its likely to cost less and not much chance it going to a tribunal. There is a slim chance the final price could go have go to tribunal for settlement.  My solicitor said this is rare , usually central London properties or properties over one million.

 

You have to get the property valued by a value surveyor on behalf of the freeholder will cost around 6-700. You can include a valuation for yourself.  The formula for arriving at a renewal price seems to be add up the cost of annual ground rent x years left on the lease.  You also pay the freeholders legal fees as well as your own. The freeholder has 2 weeks to respond to your offer. Its well worth  getting a solicitor who specializes in lease extension. There are online lease estimate you can calculate yourself. also the leasehold advisory website

https://www.lease-advice.org/advice-guide/lease-extension-getting-started/  

gives a lot of information, and solicitors who specialize. .  I used Brady solicitors in Nottingham you can talk to them get a quote. I now tend to stay with ex local authority purchase, as the lease renewal is more straight forward. 

 

The other thing is if there are other flats in the property , that look into buying the right to manage or freehold outright. Just needs 50% of the leaseholders in the property. so if there's 3 flats in the building it just needs 2 to apply.

 

Getting a new lease is around 6 months for completion. You get 90 years added to the current lease and ground rent is scrapped. It is worth looking into and well before it approaches 80 years. At that stage the lease enters the 'Marriage value" this means any sale after 80 years the profit on the sale is shared with the freeholder. Ancient feudal law, why it still exists my solicitor didn't know. So after 80 years the cost of a new lease will be much higher. .

 

Its well worth renewing a lease,  a long lease is valuable and makes a sale easier.

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A good idea in what respect Bob?

In terms of needing to renew the lease? You wont need to worry about that until it drops below 80 years

 

In terms of getting a mortgage on it? Mortgage lenders only start getting twitchy when it drop below 70 years

Kevin Wright

Positive Property Finance

Telephone: 01206 586586

Email: inspireme@thinkpositively.co.uk

Brokerage website: www.positivepropertyfinance.co.uk

Workshop website: www.ninjainvestorprogramme.co.uk

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