Lease Extension-83years to 173 years-worth it?

[Muffin]

I have a flat purchased in June 02 (therefore qualify for extending lease) for £73.5k and now valued at £135k.

The original Lease started in 1991 for 99 years (84 years left in 2006).
Ground rent details £10 for 33yrs, then £20 for 33yrs, then £30 for 33yrs.

Its a lovely apartment and although I have no plans to move at the moment, I am concerned about problems concerning saleability if selling once the lease drops below 80 years. (Is this unfounded?)

From what I have read if I applied for a lease extension now it would be much cheaper than if the lease was less than 80 years (ie no marriage value content), however the current market value would not be enhanced by doing so.

The question: Is it worth extending the lease if say I only kept the flat for the next 4-10 years and where would a breakeven occur?

Would the cost of extending the lease by 90 years (whatever it may be) outweigh the return or should I say drop in asset value as time goes by.

Any views welcome.

[tenant29]

Yes, definitely you should extend your lease before it falls below 80 years term or better still, you should join with the other leaseholders in the block to buy the freehold. Based on your 10 pds annual ground rent , you may consider offering 16 times to buy your share of the freehold + legal costs. ( if other leaseholders are willing and they should be as they face the same problem .)

If you allow the lease to fall below 80 years , you may find your future buyer asking you to extend the lease by 90 years because of his difficulty getting a mortgage loan. Mortgage lenders have difficulty judging the market value of the security when the lease falls below 80 years and "marriage value" comes into play. So the mortgage company valuer will tend to give lower market valuations and so you will be asked to accept a lower price.

Also the longer time taken to sort out a lease extension during the sale period , it will cost you more interest in your own mortgage payments.

[Tax Accountant]

I would definitely recommend extending the lease now.

Ramnik