The Lease Game

[allenlondon]

Neighbours, 'owned' their flat (maisonette) for 30+ years, have a problem. Their lease, long when they bought the flat, is now looking short, and in estate agent's terms, too short to be able to sell the flat.

They approached their 'landlord' (I use inverted commas because like all landlords of this estate of maisonettes, the landlord does in fact do nothing - no involvement at all - all they do is own the lease) to extend their lease. 99 years? Of course, madam, that'll be £35,000.

Plus the chisellers costs, of about £5000.

Absolutely stuck, of course. Can't sell (except for a hugely deflated price due to the short lease), can't afford £40K-plus.

Capitalism at work; the market rules. Long live freedom.

A.

[bobbinwales]

A think they can get it for less than 40K to useing laybirds link. Or they could call the capitalists bluff and offer 5K or nothing

[barry1010]

They have plenty of equity in the property - can they remortgage? Interest rates are extremely low

[ToraToraTora]

allen: (what do you expect me to do, pop across to some godforsaken dump like North Korea or New York to spend it?) - if you are a socialist you'd know the answer, donate it to those less fortunate. TBF though there is no such thing as a socialist in practice. So enjoy your dosh!

[ToraToraTora]

in fact why not give your neighbours the cash to extend their lease?

[AuntPollyGrey]

Allen // So what do they do?//

Perhaps give them the advice I suggested at 10.45? How rude. The advice I gave you is on the back of over 25 years as a property manager, not by copying and pasting something off Google.

[Old_Geezer]

The whole system is wrong. Leasehold ought not be an issue with one's bought home. Either sell the residence freehold or don't sell it. Can you not buy the lease ?

[AuntPollyGrey]

OG the problem is the Leaseholders are often landed gentry families or the Church that have owned the land for centuries. Often, they are unable to sell Freehold for whatever reasons, so produce Leasehold properties. It would be impossible to 'do away' with Leasehold properties. It really is not a big deal to extend leases these days if the landlords are willing. It costs money to extend a lease because the Landlord is giving permission for the Leaseholder to extend the Lease, thus adding significantly to the value of the property. The Landlord does not benefit directly from this up value, so of course wants some form of reward for doing it -usually a percentage of the current market value of the property.

[allenlondon]

Ladybirder. I'm passing your link on to the neighbours; thanks.

Or, you can side with Aunt Polly who for no good reason called me 'rude' for not instantly responding to her suggestions. Polly, etc al: I do have other problems, apart from those of my neighbours...

Odd old world.

A

[ToraToraTora]

many new leases are now 999 years so there is no problem, no reason why they can't set them to 9999999 years and make it effectively a freehold.

[allenlondon]

Tora3. Round here (NW London) 99 seems to have been the norm in the 1930s when this lot went up, meaning that over the years many original buyers fell foul of the short term.We were very lucky that (a) we had the six grand necessary (in the early 90s) and that (b) our upstairs neighbour ALSO had the wherewithal. Many didn't.

[wolf63]

I don't 'really' understand what a leasehold is - are most homes leasehoold?

[aelmpvw]

leasehold means you do not own the land that the property is built on, freehold means that you own the land

[ladybirder]

Thanks for passing it on Allen, I have bought and sold 3 FH flats in SW London and found them very helpful back in the 80/90s when I spoke to them. I don't know how APG expected me to put the link up without googling it.

[AuntPollyGrey]

Allen //Or, you can side with Aunt Polly who for no good reason called me 'rude' for not instantly responding to her suggestions//

what a childish comment. No one is taking 'sides'. Its common courtesy to say thank you when someone has gone to the trouble of giving you sound advice.

[allenlondon]

Sorry Pol, I took your comment (“Perhaps give them the advice I suggested at 10.45? How rude.”) to be aimed at me. Perhaps it wasn’t. Could you put me straight?

[Old_Geezer]

It only adds significant value to the property because it's value has been unfairly eroded due to the shortening lease. One only has to look at the issues caused to know that the system is wrong. If one buys a residence there should be no chance of one's purchase or investment becoming worthless because one doesn't also own the place it's in, and either have to pay again or lose everything. If one can't sell the freehold, one ought not use it to get folk into an unfair system.