Shared Ownership Lease Extension

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    Shared Ownership Lease Extension

    Please can someone help me!
    {Mod - name removed} have said to me the fees are £350 + Solicitor fees + a RICS surveryor.
    Im guesing the RICS surveyor is here to tell them what premium i have to pay to extend lease (i mean its just a joke)!
    I "own" 30% house approx worth 230k and 80 years lease.
    please can anyone give me a rough price for a lease extension?
    {Mod - name removed} claim i would have to pay 100% of this premium it doesnt matter how much i "own" or not...
    So, will a RICS surveyor value it based on us owning 30% or just the 100% thing that {Mod - name removed} dont seem to care about us having to pay 100% of..
    when does it become silly to pay for a lease extension? i mean is there a point? should i just accept the fact i am just a cheaper then private renting tennant that has to do house fixes...? and will never have a property to leave to my child?
    The joke part is of course that {Mod - name removed} state they are a not for profit organisation and i just cannot believe a government funded scheme would allow for this?
    And when i do a online calculator of lease extension costs do i just do house value and put ground rent as 0? we pay rent yes, but thats on other 70% as part of shared ownership scheme it isnt the same type of ground rent you pay if for example you are a flat lease hold owner. just please help on how i can self calculate as well

    #2
    Please remove the names of all companies, charities, etc.

    You appear to be a housing association tenant on a shared ownership lease or sub-lease. Housing associations are exempt from the compulsory rights to extend leases.

    Not- for profit is not the same as for loss. Housing associations have to ensure that they have sources of money, to fund their operations, just like any other business; they just don't have shareholders to give that money, so all the money has to go into the business. These days, I doubt that they get very much, at all, from central government.

    It is normal to employ a surveyor in such cases, and they will also employ a surveyor if you staircase your "ownership" at any stage.

    The shared ownership proportion is basically something between you and the housing association. I believe that, from the point of view of the Land Registry, you will just have a long lease with a low premium and a high rent.

    My guess is that lease extensions for "shared ownership" properties are rather rare.

    It is possible that you actually have a sub-lease, in which case the ultimate freeholder would want a premium based on the full value.

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      #3
      Dear Sofsofsof

      Firstly, let me clarify, I do not know anything about shared ownership situations so base my observations on the leasehold market generally.

      As your lease is 80 years unexpired now is the time to extend the lease if you decide this is important to you. This is because when your lease falls below 80 years the price of the extension will significantly increase. Marriage value will be taken in to account when determining the premium. To assess marriage value estimate the value of the property without an extension and the value once the lease is extended: divide the difference by 2 as the landlord will be entitled to 50% of the increase in value as part of the premium.

      The fees quoted for the landlord's surveyor appear reasonable and it is usual for you to pay the solicitor's fees. I guess you need to consider whether 30% (your share) of additional value that will be added to the property by extending the lease will represent value for money. You will also need to attempt to make predictions about future returns. A property will a longer lease is easier to sell too..

      It will be for you to negotiate with your landlord. Their surveyor's valuation is not necessarily the premium the landlord will request but the valuation will help them to make an informed decision about the premium payable.

      How many years are they willing to add to the lease? Are they proposing to change any other terms?

      See the LEASE extension calculator for an idea of typical premiums: https://www.lease-advice.org/calculator/
      Out of interest I input the following into the calculator: value of property after extension £280K; ground rent £0; and expiry of lease 9/2/2100. The likely price of the extension came out at £4K-£6K plus costs. BUT, bear in mind your landlord can ask any premium when negotiating a lease extension informally. AND, as the Act (mandatory extensions [see Leaseholder64's comments]) does not apply to Housing Associations you have no recourse to a Tribunal to determine the price.







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