Lease on loft space.

[ibuy]

Hi ,

I am in the end stages of purchasing a leasehold victorian conversion flat. An agreement has been reached on extending the 78 year lease . I have run into difficulty now as the loft which was sold to me by the seller has now been deemed not part of the demise by the freeholder.

The initial mortgage valuation was done with the loft included as the existing owner has been using the loft for storage perhaps not understanding her lease and giving full access to the surveryor. The seller also let me look into her loft so my structural engineer could ascertain whether I could do a conversion or not.

I am now confronted by a freeholder asking for a proposal to buy the lease for the loft.

my questions are this:

1) how does one calculate a value for a loft space? a) for just storage . b) for a conversion?
2) the property is valued at £200 000 including the loft space , what would its value be without the loft space as part of the demise?
3) can the freeholder lock the loft space if I dont buy the lease? Even if the access is exclusive to my flat ?


if there are any other pointers someone can give me please do .

thanks very much

[jeffrey]

There are 250 existing threads that mention 'loft', according to an LZ search that I've just done but you didn't.
To keep it simpler, use 'advanced search'; for 'loft' in thread title; and for 'Long Leasehold' only. This yields a more manageable 9 other threads!

[James 2009]

Hi ,

I am in the end stages of purchasing a leasehold victorian conversion flat. An agreement has been reached on extending the 78 year lease . I have run into difficulty now as the loft which was sold to me by the seller has now been deemed not part of the demise by the freeholder.

The initial mortgage valuation was done with the loft included as the existing owner has been using the loft for storage perhaps not understanding her lease and giving full access to the surveryor. The seller also let me look into her loft so my structural engineer could ascertain whether I could do a conversion or not.

I am now confronted by a freeholder asking for a proposal to buy the lease for the loft.

my questions are this:

1) how does one calculate a value for a loft space? a) for just storage . b) for a conversion?
2) the property is valued at £200 000 including the loft space , what would its value be without the loft space as part of the demise?
3) can the freeholder lock the loft space if I dont buy the lease? Even if the access is exclusive to my flat ?

if there are any other pointers someone can give me please do .

thanks very much

1) a) Comparable evidence combined with common sense and gut feel.
1) b) Comparable evidence and the Residual Method.

2) Not much difference (probably). See 1) a) and 1) b)

3) I think that would depend. What does the lease say? If the lease explicitly grants you access for light storage, despite the fact that it is not part of your demise, then the freeholder would be in breach of the lease by locking it. If, as is more likely, your lease is silent on the loft space then why on earth should the freeholder grant you access? It is his space, and he knows you want it. Why should he not lock it up prior to agreement on a price!

Actually my answer in 1) is a bit inaccurate... that is how to give it a fair value... in practice the value is whatever figure you and the freeholder agree. There is one possible seller and one possible buyer... if the leaseholder is a millionaire with a wife who loves sloping ceilings in her bedroom then it might be worth £100k. If the freeholder is a billionaire who hates the leaseholder then the price might be £2m, not a penny less! If the freeholder were to auction it with a starting price of £1 then it would probably sell for £1... unless another bidder was convinced that they could outbid you on the day and get a higher price from you at a future date!!

[jeffrey]

Also, ibuy, please check. Is the loft an area:
a. entirely outside anyone's existing lease; and
b. to which only your flat has an easement of access?