Just purchased leasehold (47yrs. unexpired): extend?

[Jane Wild]

HI
I Have owned my flat since last november and would like to do a lease extention.The freeholder is asking £36,500 which seems a lot to me,i wonder if someone could advise if this is fair.The masonette is worth £135,000 and has a 47 year lease with a 200 per year ground rent.

[jeffrey]

1. So you bought it with only 47yrs. unexpired. Did you know that, at the time of purchase; and what advice did your solicitor give?
2. Did V serve on L any statutory Notice [s.42 of 1993 Act] and assign its benefit to you? If not, why not?
3. Only once you yourself have owned for at least two years can you serve such Notice and force L to extend.
4. But you might nonetheless be able to negotiate a non-statutory extension, if L condescends to negotiate.

[Jane Wild]

Hi Jeffrey
Thanks for your reply
Yes i did know that the lease had only 47 years left and was told by my solicitor about the two year wait.However the freeholder has offered me to extend the lease without waiting for two years for £36,500 plus fees but has not charged any more than they would if i waited in fact the price would increase if i waited for the two years i assume.
I paid £135,000 for the property which needs work
The property would sell for around £190,000 when finished
Also i am planning on building a kitchen extn but wondered if this would increase the price of the lease.This would increase value of property to £210/£220,000.

[jeffrey]

Note that a statutory extension (adding 90yrs.) also reduces the ground rent to a peppercorn; so a non-statutory one could be arranged at a money-value rent (as at present) which, in turn, ought to reduce the premium payable correspondingly.

[Richard Webster]

Also i am planning on building a kitchen extn but wondered if this would increase the price of the lease.This would increase value of property to £210/£220,000.


1. Is the area of ground where the kitchen extension is to be built within the area included in your lease? If not the lease will need to be varied to include it and the landlord may charge for this.

2. Even if it is included there will probably be a restriction on alterations without the landlord's consent so you wills till have to ask for his consent and he may charge.

[Jane Wild]

The extension will be in my garden and i have notified the freeholder of my plans and sent them the drawings that have been passed buy the council planning dept,awaiting the reply.
Would like someones help with working out the formula for the lease extesion with the figures that i have given as i am finding this hard to work out myself.

[Jane Wild]

Could anyone advise me on a lease extension calculation on a maisonette with a 47 year lease please.
I have only had the property for 4 months and am aware of the fact i am not intitled to purchase the lease yet.
The freeholder has agreed to a increased 125 year lease with a increase to £200 pound ground rent per year from about £60 per year for £36,500
The property is worth £135,000 now (needs work) and £190,000 finished.
Is this a fair price?

[quarterday]

i think so...accept as quick as you can. send the landlord a downpayment of £500 so that he is less likely to change his mind!

[Gordon999]

If your property at 47 yrs lease can sell for 135K now and you spend 36.5K for lease extension, it means you will have invested 172.5 K . Can you sell the property on 125 years lease at 172.5K ( your breakeven cost ) without spending extra on improvement work.?

How much will you spend on improvement to reach a value of 190k ? ( you say it needs work ??? ) If it is 50 year old property and needs new electrics , new kitchen and CH system, it may cost more than 17.5K and then you have invested more than it is worth at finish of work.

[Moderator1]

Two separate threads by same member have been merged here. Do not cause problems by starting continuation threads; use the same one.

[jeffrey]

i think so...accept as quick as you can. send the landlord a downpayment of £500 so that he is less likely to change his mind!
That won't help- any such payment is not contractually binding.

[Jane Wild]

Thanks for your comments.
I was not expecting to have to pay so much for the lease but if this is a fair price then maybe the purchased price was to high

[jeffrey]

Thanks for your comments.
I was not expecting to have to pay so much for the lease but if this is a fair price then maybe the purchased price was too high
But did your RICS Chartered Surveyor/ ISVA Valuer not advise you of this before you committed yourself to the purchase?
If he/she did, you can't now complain.
If he/she failed to do so, complain and demand compensation for breach of contract (professional duty).