Buying with a short lease (82 years)

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    Buying with a short lease (82 years)

    Hi there. If anyone can share their opinion or experience on this topic I would be really grateful. I am a first time buyer looking to purchase a one bed flat. I have a found a flat with amazing potential, has an 82 year lease, and needs a lot of refurbishment. I'm just getting my head around leases and extensions etc and I'm not clear on what is the best option to do: one, ask the seller to extend the lease themselves (which apparently can take 6-12 months?), or two, ask them to issue a Section 42 so I extend the lease myself? Is one option generally better for a buyer? (A first time buyer at that!) My concern with option two is how long will it take until I know how much it will cost to extend? Reason being, this will surely need to reflect in my offer? Especially as I need to have enough cash in the bank to refurbish the flat (currently it's about £10k off being livable!) And also, what exactly is a 'Freeholder Premium' and how long might it take to find out how much it is? I've no experience of dealing with solicitors, surveyors etc and no knowledge of leases. Apparently the sellers have started to ask the freeholder about extending the lease, but what that means I'm not sure. I think they're unclear too and want to see how the market responds to the flat. I do not yet know the exact dates of the lease, and I assume issuing Section 42 must simply be done before it hits 80 years, no matter how close it is? Thank you so much for your help with this! Poppins x

    Hello! As a general principle, anything below 80 years gets complex as below 80 years the concept of 'marriage value' becomes part of the extension premium, and as there's no clearly defined way of stating that value, it tends to be down to lawyers shouting at each other, which can get expensive. So anything above 80 years is considered fairly low risk. I'm sure most of the time that's the case.

    However, I would add one caveat emptor - much of this depends on the freeholder of your building. If he is reasonable, an 80+ year lease is very little risk. If he is unreasonable, or aggressive, he may drag you around the court for years, using his lawyers to bully you into accepting onerous or negative terms (completely illegal of course but it's happened more often than not in my block). Do a bit of googling on your Freeholder. If he's a regular at the high court, or there are stories about him on LKP, run for the goddamned hills. I wish I had.


      You need to know the ground rent and market value of the flat to get a ball park figure for extending the lease.

      If the flat is worth £300k with GR of £250pa and 82 years left you are looking at £4-5k to extend plus legal fees yours and the freeholders, budget around £5k for these.

      So you need to be paying at least £10k less for the flat than the equivalent property with a longer lease.

      Your options are-

      1) The existing owners extends and sells with longer lease.
      2) The existing owner serves S42 and transfers to you between exchange and completion and you complete extension.
      3) You buy as is and serve S42 after you have owned property for 2 years.
      4) You buy as is and negotiate an informal extension, likely to be cheaper but on less generous terms.

      Once the lease is below 80 years marriage value comes into play, which is basically the difference in value of the flat with a longer lease factored in to the premium.


        Thanks for the prompt responses guys, really appreciate it.

        The flat is roughly: £390-£400k
        The ground rent currently: £75 (I've downloaded the Title Register, this says '£75 rising to £300')

        DNM2012 - Is it possible to work out the marriage value at all? And what about the 'Freeholder Premium' apparently he/she can charge a huge amount for this? Apparently the seller's solicitors have said £25k for the lease extension wouldn't be unreasonable to predict, that's a lot more than £10k :-S If I could save the money from the sale, then option 2 is better than option 3 right? (...many questions)

        BENZO - I'm sorry to hear you had crappy freeholder. I've bought the Title Register to find out who the freeholder is but I'm not quite sure he/she is even on there? However it says: 'Term: 125 years from 24 June 1985' - ....doesn't that make the lease 92 years? Perhaps I'm calculating it wrong..


          You can use this calculator to get a pretty accurate figure-

          If the flat is worth £390k, lease is 92 years and the ground rent is £300 pa you are looking at £5-6k for the extension.

          Until you get the figures confirmed it’s hard to tell, you can also download the lease from the land registry if they hold a electronic copy or order a paper one if not.

          Option 2 is fine, if you make sure your solicitor specialises in leasehold, but if the lease is 92 years then it’s not an immediate issue.


            The free guides on statutory lease extension can be downloaded from :



            There is an example of extension at 95 years unexpired.


              The OP's lease is 82 years, not 92. With the initial two years to qualify, it will be very close to the line by the time an application can be made if not started before the sale.

              I think the freeholder premium is the marriage value, so is not an issue until it goes over the line, unless you want terms other than those that the tribunal will give you. E.g you may have to pay if you want some covenants removing.


                Originally posted by leaseholder64 View Post
                The OP's lease is 82 years, not 92. With the initial two years to qualify, it will be very close to the line by the time an application can be made if not started before the sale.

                I think the freeholder premium is the marriage value, so is not an issue until it goes over the line, unless you want terms other than those that the tribunal will give you. E.g you may have to pay if you want some covenants removing.
                It’s not clear if the lease is 82 or 92 years remaining, the OP says they were told 82 years but the title deeds they’ve seen suggests 92 years.


                  In post 4, OP said " However it says: 'Term: 125 years from 24 June 1985' - ....doesn't that make the lease 92 years? Perhaps I'm calculating it wrong..

                  Yes , I agree it should come to 92 years remaining ( 1985 + 125 = 2110 - 2018 = 92 )


                    Sorry folks let me clarify: I was told it is 82 years, so I started researching lease extensions. Then I downloaded the Title Register off HM Land Registry (in search of the Freeholder) and it says (screengrab attached) 'Term: 125 years from 24 June 1985'
                    ..Surely that makes it 92 years?

                    DNM2012 - Thank you for the breakdown! If the flat is £400k with 82 years lease how much might that be? (I attempted the breakdown guide but frustratingly didn't get far at all.)

                    I definitely wouldn't want to go to tribunal, I'd rather not buy the flat in the first place. I've been to court already this year and it was the most excruciating process, probably on par with childbirth.

                    How else can I find out who the freeholder is? It doesn't appear to be on the Title Register. And on Land Register it appears all I can purchase is the Title Deeds, Title Register and Flood Risk.


                      If you go to Land Registry Online ( choose the proper website ) , you can type in post code address and you will be offered the leasehold title or freehold title . Pay £3 by credit card and you can download the freehold title and find out the name of freeholder.


                        The cost of a lease extension will be dependent on a number of factors that you haven't provided (including some you won't even know), so any figures quoted will be very approximate.

                        Part of the premium is to compensate the freeholder for lost ground rent (If you go for a statutory 99 year extension with a peppercorn ground rent), and to calculate this it would be necessary to know when the ground rent rises, and in what steps.

                        Other factors are the value of the property after the extension (although this mainly comes into effect if less than 80 years are left on the original lease), how greedy the freeholder is, and how good the solicitors than you and the freeholder employ are at negotiating a deal).

                        It looks like the lease has 92 years left, so it is not essential that an extension is done immediately, but if it was I would personally budget c£10,000 (give or take) + solicitors fees.

                        Going to a tribunal will not be necessary unless either party is unreasonable and you refuse to agree a price (e.g. if the freeholder wants a much higher than reasonable premium and refuses to back down).


                          Ignore the amounts quoted in my earlier posts, senior moment, these are more realistic-

                          Flat value £400k GR £300pa 82 years remaining ballpark figure £11-12k

                          Flat value £400k GR £300pa 92 years remaining ballpark figure £8-9k


                            Thanks everyone for all the above help. SO the estate agent had told me it was a short 82 year lease (which he been informed of by the sellers, and their own solicitor), but after I sent him the Title Register, which said 92 years, they have now realised and confirmed that it is indeed 92 years. (Just goes to show, never assume!) So I'm going ahead and putting an offer down. However I'd quite like one day, to be able to buy a Share of the Freehold, rather than extending the lease. Is there a way of finding out whether the Freeholders have sold Share of Freeholds on their properties? Or if they're really difficult and have been taken to tribunal etc? I've been on Companies House but it's all internal information. Is there anywhere else I could check? Thanks again!




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