Lease extension quote received too High!

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    Lease extension quote received too High!

    Hi All,

    I own a 1 bedroom flat on a high street in Penge, London. The flat was bought 3 months ago for £95 000 with a lease of 76 years left. I have approached the freehold owners who are happy to extend my lease to 125 years for £8,500!

    This is extremely high in my opinion. all the lease extension calculators I have used estimate around £4 - 5000.

    So my question is: Is this quote too high? Secondly shouldn't i get 99 years ontop of the existing 76 years?

    I have not owned the flat for more than 2 years, so I am aware I don't have much of a leg to stand on, as they are extending the lease even though I have not lived here for 2 years.

    Is it worth disputing the quote?

    Many thanks for any advice.

    Russell

    #2
    Of course dispute it.

    The reason it's so high is that at the moment you don't have the statutory right to extend.

    Comment


      #3
      But waht is yiour current gorund rent and is it revised over time( which no calculator allows for) and under teh new lease what will theh be ground rent be.

      If say the new GR is a peppercorn then the premium will be higher, if you pay a commercial rent of say £200 to £400 and its frequently required the premium comes down.

      have a look at your solicitors advice and ask why diont you point this out to me before I exchanged!
      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

      Comment


        #4
        I know the following statement may be irrelevant and not included in calculating lease extensions.

        At present, you are "renting" the property for 76 years.
        £ 95000 is a monthy rent of £ 104 per month for 76 years.

        Adding an extra 49 years, which is in 76 years time, rent is £ 173 per month. Still cheap rent for a London flat by the year 2090.

        Comment


          #5
          Russell,

          You (after 2 years as leasewholder ) are entitled to seek a 90 years extension so you should get 74 +90 = 164 years at peppercorn ground rent.

          If you study the rough calculation of cost for extending the lease given in LZforum thread No. 11080 post a few years back by our expert sgclacy you can compare the cost at 76 years ( now to 125 years ) and 74 years.(qualifying in 2 years time to 164 years )

          The example shown in thread is calculated for extension at 73.5 years and cost of statutory lease extension came to approx 5%.

          Comment

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