Lease Extension Costs Too High?

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    Lease Extension Costs Too High?

    Hello,

    I hope somebody can help me I am very confused about how the whole leasing system works.

    I live in a 2 bedroom flat which I am trying to sell. It has been valued at 220,000 and has 77 years remaining on the lease. We may not actually get 220,000 but hopefully it would not be far off.

    However, our estate agents have advised us that the most common question being asked by prospective buyers is 'how much would it cost to extend the lease' or 'can the lease be extended prior to the sale'.

    We pay £100 per year ground rent and were looking to increase the lease from 77 up to 99 years.

    Looking at various websites and making some rough calculations we came up with around £5000 to do this but our freeholder says he calculates a much higher figure, in excess of 20,000. I find this hard to believe and my estate agent laughed and said it was ridiculously high.

    Does anybody have any way of calculating what would be considered reasonable to extend the lease by 22 years under the current terms? or should we be taking things into our own hands further and going for an increase of up to 150 years with peppercorn rent.

    Any help would be really appreciated.

    #2
    There is a Leasehold Advisory Service calculator- try here: http://www.lease-advice.org/.
    If you have owned for at least two years, you have a statutory right to a Deed of Surrender and Regrant. This would:
    a. add 90yrs. to your term; and
    b. reduce ground rent to a peppercorn [no-money rent].
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

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