LEASEHOLD FLAT?????

[j0nb0y]

I am currently trying to sell my 'leasehold' flat which has approx. 72 years remaining on the lease. I had three estate agents come round to value the property, including the one I bought the property through last year. They gave me by far the lowest valuation, explaining that they struggled to sell it because it had such a short lease and people without a massive deposit could not get a mortgage on the flat.

This leaves me with a few questions:

1) what length of lease do a mortgage company require?
2) is it worth extending the lease?
3) the flat is in a block of 4, would it be worth going in for 'COLLECTIVE ENFRANCHISEMENT'.

Any replies would be much appreciated.

[bednobs]

1) not sure
2) it is a judgement call for you - you will have to work out the price of extending the lease versus the higher price you could get for the flat. Also take into account ease of selling.
3) sorry dont know what that is

[humpy07]

1) Mortgage companies usually require the lease to run for 25 years after the remainder of the mortgage. For example, if you have a 30 year mortgage, you will need at least a 55 year lease. You could check on the CML Handbook (part 2) website to check what the latest requirements are for individual mortgage companies.

2) Extending the lease can be a costly process what with valuers fees, solicitors and also the cost to the freeholder.

3) This may be a good option for you, providing at least one other leaseholder is happy to go ahead too (2 out of the 4 flats will have to agree). You will have to make sure that the other leaseholders are 'qualified leaseholders' before serving the initial Notice on the Landlord

[j0nb0y]

Thankshumpy07!!! I know at least two other residents in the block would be interested and both are owners of the flats. Would this be a cheaper option than extending the lease on my own property?

[humpy07]

I believe it would be cheaper, as legal costs etc would be shared. I've been out of the property law game for a few years now, so I'm not sure how much a solicitor would charge. Also I think you would all be liable for the Landlord's legal costs.

It's definitely an option I would seriously consider, as you would then be able to have the lease drafted for 999 years, and with no silly clauses. It also makes selling easier, as you won't have to pay out to a Landlord for completing enquiries on the property.

If you decide to go down this route, feel free to drop me a line... I've got loads of old texts here, and I can advise further.

[j0nb0y]

Thanks again humpy07! I appreciate your advice and will certainly seek your help again, once I have had a chat with the other owners.

[stoofur]

I am actually at the other end of this type of question as I am a landlord and my leaseholder wishes to extend her lease. We were quoted between 300 and 400 pounds by our solicitor for legal costs of extending the lease and the leaseholder is responsible for paying this. We also went down the valuation by a surveyor who also charged around 300 pounds. Which again the leaseholder had to pay.