Surveyor Dilema

[ricky173]

Hi. I would be exceedingly grateful if someone would offer me some advice on the below:

I bought a 2 bedroom flat in Tottenham, London in May 2000 for £86,500. I lived in the property for 6 years before letting it for the last 2.5 years.

There is 58 years and 4 months left on the original 99 year lease.

The ground rent is £15.75 per year.

I now wish to sell and use any equity for a deposit on a house.

I have spoken to the freeholder and with great sucking of breath and telling me that "it won't be cheap you know" he says he will be looking at around £18K-£19K.

My flat was valued at between £150,000 and £175,000 by a couple of estate agents and I have been made an offer by a cash investor for £165,000 today (on the understanding that the lease would be sorted).

I am keen to sell quite quickly and don't really want the extra head ache of a leasehold tribunal lasting for ages.

Is the landlord's figure about right...Or should I offer him less? If we agree verbally on a figure what would be my next step and what's the shortest timeframe I could get this sorted?

Any advice given would be very gratefully received.

I recently submitted the above query and ‘jeffrey’ and ‘sgclacy’ very kindly worked out the premium to be £18,130 based on an unimproved property value of £165,000.

I am now ready to instruct a solicitor to act on my behalf and start the ball rolling, however I am still unsure whether or not to employ the services of a surveyor to assess and calculate the lease extension fee.

The surveyors I have spoken to want around £450 for their services. Would it be wise to employ their services? Or is this a complete waste of money, based on the fact that I already know, from the advice kindly offered by experts on this site, the ball park figure that I am looking at – based on local estate agents valuations. Is there a quantifiable difference between ‘unimproved property value’ given by a surveyor and valuations given by local estate agents?

If for argument sake, a surveyor values my property at £10,000 less - an unimproved property value of £155,000 - what would this save me lease extension wise? And would it likely to be contested by a surveyor acting on behalf of the freeholder? And if it is contested by the freeholder, what would I be looking at in extra solicitor costs if it were to go all the way to a leasehold tribunal?:confused:

Basically if you were me, would you simply employ a solicitor and offer the freeholder £18,000 or would you first employ the services of a surveyor?

As always any advice/opinion offered would be very gratefully received.

Thanks

[kikuyu]

I would not think that the two gentlemen you have named would endorse that you purchase or extend your lease on their say so. Whilst I can not speak on their behalf, I am sure they will advise you to take professional advice.

What you have let on may be just the bear minimum. What about your improvements? Have they been taken into account? What are the other terms of the lease, service charge etc.

I am sure you realise that valuation is not a science and there is more to it. Someone I know thinks that this can be done by merely putting numbers in the computer and getting the end result. He couldn't be more wrong.

£450 is not too large a fee to pay for a professional service so please go down this road. Even if you save little or nothing you will have no regrets and doubts whether you paid too much or not.

[Poppy]

Simply offer £18,000 and see if the freeholder will accept it without further delay to your sale.

[ricky173]

** EDIT ** Apologies, it was 'wakeywakey' and 'sgclacy' NOT 'jeffrey' who kindly provided the premium calculations.

[ricky173]

I would not think that the two gentlemen you have named would endorse that you purchase or extend your lease on their say so. Whilst I can not speak on their behalf, I am sure they will advise you to take professional advice.

What you have let on may be just the bear minimum. What about your improvements? Have they been taken into account? What are the other terms of the lease, service charge etc.

I am sure you realise that valuation is not a science and there is more to it. Someone I know thinks that this can be done by merely putting numbers in the computer and getting the end result. He couldn't be more wrong.

£450 is not too large a fee to pay for a professional service so please go down this road. Even if you save little or nothing you will have no regrets and doubts whether you paid too much or not.

Kikuyu, thanks for the above, however my query is more whether or not a surveyor would confuse matters and make the whole process more expensive for little to no gain?

I know that £450 is not a large amount of cash, but if the result of this valuation causes the freeholder to reject the offer and stick to his own valuation of between £18K and £19K, (which incidently or coincidently tallies with 'wakeywakey' and 'sgclacy' calcuations) would this not just lead to a lot more expense to my and his solicitors bills - for which I believe I am responsible for?

I appreciate that it is not an exact science, however it appears that there is some type of scientifc formula that ultimatley a leasehold tribunal would use to resolve any disagreement?

Thanks.

[ricky173]

To put it in a slightly different way, for the premium to go down by £1,000 how much would a surveyor have reduce the valuation of the property by? (There are no other specific paramerers other than those mentioned in the original query i.e. no service charge etc.)

[WakeyWakey]

A £10,000 reduction in unimproved value would reduce the premium by around £1,000. Your £450 surveyor's fees may be "plus VAT", i.e. £517.50. If it of any help I paid £1,000 (including VAT) in total to take a case to an LVT but it was well worth it. It may not be worth a landlord or lessee going to an LVT if the difference between them is less than £1,000.

Landlords are aware that it is a buyers market. How long will it take you to find another buyer at £165,000 if you lose this one by delaying on a new lease? If the market is still falling, what if it takes you another 6 months to find another buyer and can only sell for £164,000? Will it have been worth you knocking £1,000 off of the lease price?