Offer from Freeholder

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    Offer from Freeholder

    I've just be contacted by freeholder pointing out that there is only 76 years remaining on my lease for the flat.

    The flat is one of 3 in a Victorian Conversion property.

    The freeholder has pointed out that to renew my lease under the Common Leashold and Reform Act 1993 that I will be paying a premium and that the the lease will be extended to 90 years and the ground rent would then drop to a peppercorn. This will include freeholder surveyor and legal fees to approx £8000

    Instead he's offering me the 2 options below

    1)An extension to the lease of 90 years and the ground rent dropping to a peppercorn for £7000


    2)A new 99 year lease at a cost of £2800 with a new rent of £250 pa link to RPI

    At the moment the property is let out although we could be looking to sell in a few years time.

    My dilema is if I really need to extend at all ? If do then what will be the total cost be if I'm taking into consideration any legal fees etc. (which I guess I would still need if take one the freeholders offers)

    Any pointers appreciated

    What is the value of the flat if it had a very long lease and what is the ground rent rent and any increases

    Establish how much the landlords legal and valuers cost will be before commencing


      You may find it difficult to sell the flat with the number of years currently remaining. This is because any lender of a potential buyer will want to ensure the capital value of the asset does not diminish before the end of their mortgage period (usually 25 years).

      I I were you, I'd opt to extend now to avoid any issues, and the figures involved don;t sound extortionate, but perhaps other can advise you on value, and which of the options may be better.


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