Lease extension cost and procedure

[dptexe]

Hi I am hoping someone can help. I have been looking at a few leasehold flats to buy but I am a bit confused with the whole leasehold extension process. The previous flat I bought had 114yrs left on it so it was never an issue. Most of the flats I am looking at to buy have around 95-97 yrs left on the lease. I am assuming this is acceptable and nothing to worry about. At what point would I need to think about renewing the lease when I come to sell i.e how many years can I let it run before I need to think about it. When I do come to renew, what sort of premium would I be looking at say on a property that currently has 97yrs left, the ground rent is £50 pa and is on the market for £179,995 assuming I renew in seven years time to bring it back upto 99yrs? I understand there is a formula, is there a website that would work it out for me?

I guess I just don't want to be stung with a huge charge when I come to renew, the problem is that flats with more than a 125yr lease are few and far between.

Any help would be gratefully appreciated

Many thanks

[jeffrey]

1. A lease is ownership for a defined (or definable) period.
2. So it is a wasting asset. The value declines as the unexpired term declines.
3. Any lease with > 80 yrs. unexpired is OK.
4. Below 80 yrs., lessee pays extra ("50% of marriage value") if buying a term extension from the lessor (landlord/reversioner).
5. Below 70 yrs., most mortgagees (lenders) do not consider lease a good and marketable security.
6. Once lessee has owned lease for > 2 yrs., he/she acquires legal right to extend term. However:
a. leasehold vendor with such right (having served Notice of Claim on lessor) can assign benefit of right to leasehold purchaser; and
b. it is always possible to negotiate a non-statutory extension IF lessor is willing to co-operate.

[smnjas]

Out of interest, is there a maximum unexpired term of a lease, before arriving at which a Notice of Claim under s.42 of Leasehold Reform Act 1993 cannot be served ?

[sgclacy]

Out of interest, is there a maximum unexpired term of a lease, before arriving at which a Notice of Claim under s.42 of Leasehold Reform Act 1993 cannot be served ?

No!........

[jeffrey]

Out of interest, is there a maximum unexpired term of a lease, before arriving at which a Notice of Claim under s.42 of Leasehold Reform Act 1993 cannot be served ?
As to which leases are covered by s.42 (individual's right to extend), see s.7. This defines "long lease" for the purposes of not only lease extension but also collective enfranchisement. It imposes minima but no maxima.