Lease Extension Calculator confusing

[Ian_R]

The Leasehold Advisory Service have put a calculator on their web site, for guidance only.

http://www.lease-advice.org/calcframe.htm

[Spidey]

The Leasehold Advisory Service have put a calculator on their web site, for guidance only.

http://www.lease-advice.org/calcframe.htm

That's a great thing......but unfortuately it won't work for me, as I've only got 57 years left on the lease :(

[SRC214]

Can anyone help me ?

After searching the net several months ago and not finding a reliable calculator , I finally found a post on here from SGCLACY. It was dated 4th May 2008, It was a very good way of getting an idea of costs. I copied and pasted the table into a document and saved it for future reference.

It seemed to work well when I was calculating the cost of a lease with 70 years unexpired. I have today tried to use the same method for
Several properties with around 79 years unexpired and the property worth 90k – 100k and I am getting a negative figure.

Does any one else have another calculator on here or perhaps I am working it out wrong.

This is the back end of the post:




So for example a lease of 73.25 years remaining. Ground rent £30 per annum for first 33 years £60 for the next 33 years and £90 for the final 33 years remaining. Flat worth £180k if it had a long lease

Step 1 - Ground rent of £30 X 18 (as it rises) = £540

Step 2 - £180k divided by 35.22 = £5,111

Step 3 - £180k X 7% = £12,600 less £540 less £5111 = £6949 X 50% = £3,475

Premium payable = £540 + £5,111 + £3,475 = £9,126 for a 90 year ext with the ground rent falling to a peppercorn[/COLOR][/B]






So this is what I was trying to calculate: based on 79 years unexpired and flat worth 90k

1.. Ground rent £100 x 18 = £1,800

2..£90k divided by 47.20 = £1,906

3. £90k x 3% = £2,700 less £1,800 less £1,906 = - £1,006 !!!!!!!!

Because I end up with a minus figure at the end of step 3 I have come to halt.

Someone on here preferred to a calculator on Thread no 11080 but I don’t know how
To search via a thread number.

Thanks for any help.

[jeffrey]

Here's that thread: http://www.landlordzone.co.uk/forums/showthread.php?t=11080

[sgclacy]

In my thread I stated

3) Take the value of the flat and apply the % in column B below and from that deduct the result in 1 and 2 above. Take the result and take 50% of that figure (only if positive). (Always round down the term so 74.5 years remaining look up 74)

Therefore you ignore the result in step 3 you (it was negative) so the premium is

£1800 Plus £1906 = £3,706

[locationlocation]

I have the chance to buy a flat in the next street to where i live for my son who has learning difficulties , flats here rarely come up for sale but i have a limited budget and need to under the financial risk if i was to purchase it .
The flat has a unexpired lease of 52 years and i am told has no ground rent.
The seller has not applied for a lease extension as he is getting divorced so i'm told and does not want his partner making any more money out of him ... What joy!

So where do i start in trying to understand the complete cost to extend to say 150 years and will i need to instruct a surveyor and solicitor to act on my behalf or is there a cheaper route for which i can take to understand the lease costs before i buy ? Also what other costs do i need to consider .

Would welcome soem advice if possible

[quarterday]

At 52 years unexpired, I reckon you are looking at about 18% of the extended lease value. So if the flat would be worth say £50,000 with a lease of 142 years reckon on Nine Thousands plus the landlords legal/valuation fees which ought not to exceed £1500 or thereabouts. The costs stay about the same irrespective of whether the flat is worth with a long lease 100K, doubling the premium, etc.


In practice such a short lease is virtually unmortgageable and if you need an advance from a lender the question of a lease extension will have to be dealt with at the point of purchase, The usual procedure is to ask the seller's solicitors to write to the landlord's solicitors to see if they will sell a lease extension and on the day of completion the transaction goes through with you buying the old lease as varied by a Deed of Lease Extension.

In the unlikely event that you can get nowhere with the freeholders you will have to wait two years before becoming qualified to compulsorily acquire a lease extension. It is possible that circumstances will change but the effect on the premium in percentage of long leasehold values in waiting for two years is not going to be dramatic, and will only rise by a few percent.

Best of British

[locationlocation]

Do you mean if the value of the flat was 50k more with an extended lease?
The seller will not complete an Assignment before selling so i will have to wait 2 years to extend ? there will likely be on then 49 years left . Will the cost dramatically increase ?
What about something called a marraige value ?

I used the calculator posted by someone else on this thread and the total came out at £18,000 to extend lease. This is what makes me nervous as one one hand someone says it will be 9-10k to extend and then another says nearer 20k. Apart from asking the freeholder how much he will want ,how can i understand what is likely to be the going rate.
The flat is being puchased fro 82k and with an extended lease will be valued at around £120k

Thanks for your help in improving my understanding.

[quarterday]

given the long lease value now supplied £18000 is about right in my view

[locationlocation]

If you buy a lease property at say £80k spend £10k on it as it badly needs to be modernised. You then renew the lease which makes the value of the property with a new lease £125k, do you take the 50/50 marriage value split from the price paid for the property or the price paid including renovation costs ?

[leaseholdanswers]

(c) on the assumption that any increase in the value of the flat which is attributable to an improvement carried out at his own expense by the tenant or by any predecessor in title is to be disregarded;

(A leaseholder is a tenant with a long lease)

Improvements intended are entirely disregarded.

[maxh]

Found a useful lease extension calculator (http://www.fridaysmove.com/lease-extension-calculator/calculator-page-1) online. Wish this was around last time I had to extend a lease, would have saved me a ton of time and even more money! :mad:

One of my properties is dipping close to the 80 year mark so time to talk to the freeholder!

[kikuyu]

Found a useful lease extension calculator (http://www.fridaysmove.com/lease-extension-calculator/calculator-page-1) online. Wish this was around last time I had to extend a lease, would have saved me a ton of time and even more money! :mad:

One of my properties is dipping close to the 80 year mark so time to talk to the freeholder!

Get started pronto. People not in the kniow always think that they have a very long lease if it is 80 years or so only to find to their detriment that the value soon escalates as this period reduces.

Good luck.

[Mags25]

I have just used the calculator link you have recommended and the quote was £14,000 more than the freeholder quote. :confused:

[Gordon999]

That's a great thing......but unfortuately it won't work for me, as I've only got 57 years left on the lease :(

Check out LZ forum thread no. 11080 posted by our expert , sgclacy

[jeffrey]

Check out LZ forum thread no. 11080 posted by our expert , sgclacy
The link is http://www.landlordzone.co.uk/forums/showthread.php?t=11080.
Gordon999: isn't this a better way to reproduce your (invaluable) help, esp. to a member unfamiliar with LZ's layout?

[Moderator1]

Three threads on the same topic have been merged here.

[Valman]

There is a website that is accurate. Try Googling lease extension calculator. It costs fifty quid but appears to be accurate. You will know that you are on this site as it has logos that appear to look like key holes!