Harringay, Haringey - So Good they Spelt it Twice!
Extending lease on ex-council flat, how much? How long?
Hi,
We are planning to sell our 2bed flat on a popular estate overlooking liver Lea. But I've just noticed we have only 86 years left on the lease which I think will probably affect the price !!!
Has anyone recently extended their lease with the council as the freeholder?
What sort of price range and timescale are we looking at?
I've used the lease extension calculator but I want to hear people's stories and experience with the council specifically.
Any info appreciated!
Thanks
M.
Replies to This Discussion
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Permalink Reply by Seema Chandwani (Cllr) on
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Watching...! The council are also buying back former council homes so you may wish to look at that option. If you have lived there for under 10 years I understand you may have to give them first right of refusal.
Rebecca Begej at rebecca.begej@homesforharingey.orgor on 020 8489 1075 Is your best contact I think.
I only know this as I’m a leaseholder and am selling soon so did research, sorry if it’s wrong.
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Thanks! yes I'm looking into that option too, and spoken to Rebecca. Unfortunately though, the short lease would affect the price even if we sold back to the council ... apparently....
Has anyone sold back to the council? How much did they offer compared to market value?
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I think this is only on properties that were sold off after 2005 no?
Edit - found this - 'Where properties have been sold in the last 10 years and we have a legal right of first refusal
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I think the law is going to change on leaseholders over the next few years.
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Permalink Reply by Rob B on
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Hi
I’m a lawyer specialising in this kind of work.
86 years is not short and won’t affect a sale price. 82/83 years is when you need to start thinking about extending really (although no harm in doing it at 86). Never let it get to 80 years. If you are looking to sell and the buyer wants an extended lease you can arrange to commence this as part of the sale process at the buyer’s request.
there is nothing special about the price of a lease extension with the council rather than anyone else other than their costs you will have to pay will be lower. You can probably budget for £2k for their costs (compare with £3-£6k for a private landlord)to the poster above saying the law is going to change over the next few years the answer is “maybe”. The law commission has recommended changes to the government, but most practitioners agree that there is no clarity on when or how or what changes will be made, and individual leaseholders should not make decisions now based on potential future changes to the law. Any changes are going to be no sooner than 2-3 years away is my guess. 3-5 years more likely.
if you would like to read an article I wrote on the subject... https://realestate.howardkennedy.com/post/102gpi7/surprise-announce...
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Thank you all. I'm aware of the proposed changes, but like Rob, I don't think we can just say to potential buyers "don't worry about it, the law is going to change". The lease will still have to be extended at some point, it might just be cheaper in the future, and the extended lease will be longer.
Thanks for a very interesting article, Rob. So, do you not think that the 86 years might put some people off? I've seen very different views on other forums. Some people have said they wouldn't even view, others think it's not a problem.
I know that we can start the process of extending as part of the transaction, but someone still has to foot the bill, so what's the best way? Will the potential buyer not try to negotiate the price based on this? And if so, what is the reasonable discount that we should give? How much would it actually cost to extend the lease, with all the associated fees, in your experience?
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86 years should not put off a properly advised buyer. There is nothing wrong with it. Many property buyers are irrational however, so I can’t say it won’t become an issue.
i wouldn’t be offering any sort of discount on an 86 year lease. If the buyer wants a lease extension that’s up to them
In terms of costs if you did it yourself I would charge around £4k plus vat for a lease extension, but that is city law firm prices which are totally disproportionate for yours. With a local firm you might be looking at half that. Then you have to pay a valuer. And the freeholder’s costs. Budget £6-8kin costs in total?
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Hi Rob, is that 6-8k in total including the extension itself, or just ancillary admin costs?
Thanks
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Cost of 2x lawyers and 2x valuers.
the price for the new lease is something else entirely. I’ve had prices from £2,000 to £2m.
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You might also find it helpful to look at this website: extendnow.co.uk They’re an offshoot of Gilmartin Ley, surveyors based relatively locally in N21. I used them for freehold purchase from my then-freeholder, with a separate solicitor for the actual conveyance, but they also cover lease extension, as the name suggests!
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