Hi,
I'm looking at buying a flat, I'm now worried about this whole leasehold business.
The flat has 79 years left on the lease.
As I understand, mortgage companies dont give out mortgages on anything less than 75years. I was hoping to sell the flat in 4 or 5 years time and by that time, no one would buy it because they wouldnt be able to get a mortage on it!
Am I correct or is 79 years ample time left?
Regards, William
In message , Will writes
yes
No
Look for something else.
Hello John,
And what would you say was a decent lease time?
Thanks !
William
In message , Will writes
999yrs is ideal!In reality, I would not go for anything less than 125 years.
Not true at all. A minimum lease at outset will generally be around 55 years at leaving a minimum excess lease of 30 years. Abbey & Halifax for example. Also it is worth asking your solicitor to confirm the cost of extending the lease. In a lot of cases the cost is nominal and can be undertaken as part of the conveyancing process
[..]
No - you should be able to get a mortgage relatively easily up until about
55/60 years, however the next purchaser may well insist on having the lease extended if it falls this low.You have to remember that a leasehold property is a diminishing asset (so it's value - theoretically- decreases over time). From memory, the 'magic number' as far as residential long leases is concerned is 80 years. Any lease with 80 years or more left can be renewed free of charge (i.e. with no charge from the landlord) since it is considered to have no 'marriage value'.. All you would have to pay would be your legal fees, and the landlord's legal fees.
After a lease falls below 80 years, the landlord can charge to extend the lease. The amount they will charge is often nominal - but it's worth finding out prior to purchase. A good tactic would be to negotiate a renewal of the lease to 99 years as a condition of purchase.
You also need to consider the service charges - make sure you ask lots of questions about the annual maintenence charges (whether they're fixed or variable, and whether there are any major maintenence jobs planned for the next few years). Ask to see a copy of the last three year's accounts, and also ask whether there have been any disputes with the landlord.
There are some useful resources on the web. The best by far is
AntonR.
Thanks Jerry, I'm currently looking into this. I just want to make sure that when I want to move on in 4 or 5 years there wont be any problems selling it.
Thats very interesting, I will look into this. I think it may still have 80 years left (just). Thanks Anton
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