New 125 yr lease- premium lower than if a longer term?

[Bel]

Interesting points raised. Thanks.

Can anyone recommend a good article on the web regarding what to look for when buying leashold property?

[James 2009]

Interesting points raised. Thanks.

Can anyone recommend a good article on the web regarding what to look for when buying leashold property?

Not a direct answer but -

Read the lease yourself and make sure anything that you do not understand is explained to you by your conveyancing solicitor.

Take lease extension cost advice at the time of purchas from a chartered surveyor. There is nothng to stop you agreeing 'extras' with you valuer (ask him to quote for reading the lease and commenting on it).

I have a copy of a book called "Which? Way to Buy, Own and Sell a Flat" published in 1996 but if there is an udated one then buy it!

[jeffrey]

Read the lease yourself and make sure anything that you do not understand is explained to you by your conveyancing solicitor.

This is a good rule of thumb for anyone at all who buys anything leasehold (or even a freehold subject to someone else's leasehold).

[sgclacy]

If you are buying a flat then when considering saleability you have to distinguish between
a. the fact it is flat; and
b. the fact it is leasehold.

Some people do not like flats because they are too close to others and do not have garden and in some way have to contribute towards the cost of maintenance of the structure, insurance etc. This happens also where there is a commonhold (government attempt to legislate so flats could be "freehold" without a landlord in the normal sense) - if you can find one - very few have been created.

"Pure" freehold flats are a rarity, only mortgageable with a few lenders in Scarborough, and otherwise generally worth less than equivalent leasehold flats because of the problems with enforcing maintenance and repair etc.

So basically if you want to or buy a flat it is nearly always going to be leasehold. ("Share of freehold" still involves a lease.)

As has been mentioned, 125 years is the fashion at the moment. No magic reason for that - Barratts have built new locally with 155 year leases - or you could have 133 or 147 years or any other length just to be different!

Valuation is mainly about size, condition, location and facilities. Length of lease is rarely a factor unless it is known to be particularly short (say 70-75 years or less) where there will be some discount, but its amount will be subjective.

So I know of a case where a few years ago similar maisonettes built by the same builder, one with 75 years remaining and another with 975 years remaining were advertised at an identical price by estate agents. (I advised my client to buy the one with the longer lease!)

I agree with others and don' t think there is any valuation difference between 125 and 999 years as far as a flat is concerned.

My understanding as to why 99 years was very common years ago as oppossed to 125 years was simply that a small (and I mean small - less than £50) amount more stamp duty was payable once a lease exceeded 99 years when it was granted.

[jeffrey]

My understanding as to why 99 years was very common years ago as oppossed to 125 years was simply that a small (and I mean small - less than £50) amount more stamp duty was payable once a lease exceeded 99 years when it was granted.

Yes. The old SD 'trips' varied from time to time, but I recall some that occurred at 21/35/99/999yrs. At least this is one* advantage of SDLT.

*- perhaps the only