Lease extension- 75yrs. unexpired, £50 rising ground rent

[Katskat]

I am wanting to extend our lease and unsure whether to go with the act or the offer the freeholder has already offered. Am very confused so any advice pointers would be much appreciated!!

We have 75 years left on the lease, the ground rent is £50 and increases every 25 years.

We recently had the flat valued and they said it was worth around £190,000 -£200,000 - maybe more in 6 months time.

I put these details into the calculator on the leaseholders advice website and it said we should be eligible for an extra 90 years with no ground rent for between £8,000 to £10,000.

The freeholders have offered us £7,500 to top us up to 99 years. they said the ground rent would be increased by £50 per annum. we would pay both sets of legal costs.

The second option is obviously better for terms and conditions but would be more hassle and cost more in legal fees. It would also be more cash now even if you get more for your money. Also, I am afraid that if we sell within the next 10 years or so which we might, the added years to the lease might not make much difference to the value of the flat for resale.

Can anyone shed any light on what option to go for??

Thank-you!

[Gordon999]

Mortgage availability for leasehold properties falling below 70 years is more difficult for prospective buyers so the buyer will try to reduce their offer price. You have to decide on a lease extension or collective buying the freehold ( with others leaseholders ) or selling now.

If you go for the statutory lease extension of 90 years plus peppercorn rent then future selling of a property with 160 years lease and no ground rent will help you to ask for a higher selling price and probably gain a faster sale ( and possibly some savings on loan interest if there is a mortgage to service )..

If you go for the 99 years option , you are paying 7500 pds just for a 19 year delay to paying for a higher price lease extension and you will be paying for ever higher ground rents.

Check the legal costs of employing a solicitor for leasehold extension and if the cost of extension can be added to your existing mortgage. Then make an offer of say 7000 pds for the statutory extension and mention you may consider applying to LVT to determine the price ..

[TomMerralls]

In this situation, a 99 year lease might not be long enough if you are looking tio sell in about 10-15 years time.

The total EXTRA professional fees you may incur by going down the statutory route could be around £1500-£2,500 in my experience.