Lease extension

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    Lease extension

    Hi all,

    just to refresh info!
    My husband and I are the freeholders, we have been asked by one of the leaseholders to come up with a premium for a lease extension for his flat. he has asked that we do it privately which we don't mind.
    His lease is from 1/12/97 Ground rent is £50 for the 1st 33 years, 2nd 33 years £100 and £150 for the last 33 years. The flat is worth £145'00 - 150'00.
    I would like to offer him ideally a low premium for a high ground rent, but he has indicated that he would rather a lump sum payment with no ground rent! He has asked me to put together a few suggestions for him to think about. He wants to go forward with the lease extension in the next year. Any Ideas what I should offer him?
    I have thought of £4'000 plus £500 for our costs. (and i will tell him we will not instruct a valuer)
    for 90 years + his current term with nil ground rent.

    Or £2'500 plus £500 for our costs to make the term up to 99 years,with the same ground rent as he had befor

    Or £1'000 plus £500 for our costs to make up term to 125 years with ground rent of £250 fixed.

    Hi Hollyhead,

    As a freeholder why wouldn't you want to keep ground rent and increases? This protects your investment and keeps value in it.

    Unless you are desperate for cash right now I would offer lower premium and keep ground rent.


      Hi rg41,

      Thank you.

      I quite fancy having both scenarios! But I do see the point of having ground rent!

      He wants it in writing but I am loathe to do this for obvious reasons!


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