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Hi wise people.
I am about to buy a flat with 110 years on the leasehold. Do flats tend to depreciate with each year that goes buy because of duration of the leasehold?
Is it typical to be able to extend a leasehold in a block of purpose built flats?
Thanks
No actual experience, but I know the length of the leasehold can affect the price or desirability of a property, and you can negotiate an extension on the lease.
Probably not an issue unless you are still there in 20 years
It becomes much more expensive to extend a lease if less than 80 years are left. Up to that point it doesn't really impact anything, but the 80 year mark is pretty important as it'll cost thousands to extend it after that point. Mortgage companies get twitchy with sub 60-70 years left.
Depends on the freeholder, ours was an awkward sod. The 80 year thing is true so wouldn’t worry about it.
I’d be more concerned about the covenants associated with it, our last one meant we had to pay fines for each year we hadn’t bought insurance through their broker, nothing crazy but certainly an archaic ball ache.
Thanks is all.
Some good and consistent advice there.
So is it quite common to extend a lease?
How would I go about it?
You have a right to extend your lease are you've owned the flat for, I think, 3 years. At 100+ it shouldn't be too expensive as the marriage value will be small. Unfortunately we'd ended up just falling below 80 due to the freehold having been passed through a series of elderly people who died in short order.
It was quite expensive as the freehold was bought by a commercial business.
We have just extended our least from 67 years up to 999 year. As others have said anything under 70 years makes mortgage lenders twitchy is I think it’s a bit stupid if the mortgage is a lot shorter term. We have had a bit of fun and games due to the lease was originally a freehold for the whole building and was bought by the at the time tenants to become a lease hold (the idea being to be able to own the lease of building if you own one of the properties). This would cut the cost from £25-30k down to just solicitor fees of £2k. But because the leases were not extended straight away there is potential to pay capital gains tax. Most solicitors don’t know about this but thankfully a family friend specialises in this and is able to apply for a change in documents with the IR. One flat has been changed which has set a president but the next flat was rejected. Covid as slowed up the process better IR, solicitors, and (in house) management company. Because ours wasn’t done at the same time as the other flats a few years prior and before we found out about the tax we personally might get our own tax bill over the management company (that I am part of as being a flat owner) tax bill.
If I could give any advice to anyone, try not to buy flats