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Extending the lease on a flat

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If there are only 60 years left on the lease of a flat, does extending it mean bringing it back to its original 99 year lease, (a 39 year extension) or does it mean adding 99 years to the lease, in addition to the original 60 years, making the new lease a total of 159 years?

 

Also I notice most council flats tend to have 125 year leases, is there any particular reason for that?

 

Could a lease be changed or extended to become a 125 year lease, if originally it was a 99 year lease? Is there any reason why a freeholder would object?

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If there are only 60 years left on the lease of a flat, does extending it mean bringing it back to its original 99 year lease, (a 39 year extension) or does it mean adding 99 years to the lease, in addition to the original 60 years, making the new lease a total of 159 years?

 

Also I notice most council flats tend to have 125 year leases, is there any particular reason for that?

 

Could a lease be changed or extended to become a 125 year lease, if originally it was a 99 year lease? Is there any reason why a freeholder would object?

 

In answer to your first question: it's an extra 99 years. Assuming you're not a council/ha tenant, the law gives you the right to extend your flat's lease by 99 years (so up to 159 years in your example), and reduce the ground rent to zero, for a price fixed by a legal formula. For good free advice, see the Leasehold Advisory Service: http://www.lease-advice.org/faq/how-can-i-extend-my-lease/

 

To your last question: if you want anything other than the standard extension (+99 years), e.g. to make it specifically 125 years, you would need to negotiate with the freeholder - and everything in the lease would be up for grabs. They might say no, or they might ask for an increase in ground rent, or they might add extra conditions to the lease contract, etc.

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What happens if the lease runs out totally ? Can the land owner just serve you notice and kick you out, even if you own the property ?

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What happens if the lease runs out totally ? Can the land owner just serve you notice and kick you out, even if you own the property ?

 

Pretty much, yes!

That is why extension of the lease or purchase of the freehold gets very expensive once the lease length drops below 80 years. Google "marriage value" for more info.

I viewed a house that only had 88 years left on the lease. Wouldn't touch it with a barge pole! And neither were any other buyers, according to the EA. at around 60-65 years it also becomes practically unmortgagable too.

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What happens if the lease runs out totally ? Can the land owner just serve you notice and kick you out, even if you own the property ?

 

When the lease runs out, you don't own the property any more.

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When the lease runs out, you don't own the property any more.

 

Well you may not own the land the property is on, but you still own the bricks and mortar. Surely the leaseholder can negotiate with the freeholder to make some contribution towards the property rather than the freeholder just take the property!!!

 

Otherwise what's the point of buying a leasehold flat or maisonette, who knows how your circumstances may change if you own the flat all your life then fall on hard times in retirement and find you can't afford to extend the lease.

 

In London, extending the lease could work out more than the original cost of the flat/maisonette, if you bought the property more than 25 years ago in London. :o

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Simple - don't buy a house with a short lease! Or if you already own one get it extended or bought long before it hits the 80 year mark.

My house is leasehold -850 years on it.

 

I wouldn't consider a house with less than 80 years unless it was significantly reduced in price - enough to cover the cost of purchasing the freehold.

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Simple - don't buy a house with a short lease! Or if you already own one get it extended or bought long before it hits the 80 year mark.

My house is leasehold -850 years on it.

 

I wouldn't consider a house with less than 80 years unless it was significantly reduced in price - enough to cover the cost of purchasing the freehold.

 

A year ago in east London, I saw a one bedroom ground floor flat, part of a converted Victorian terrace house, with only 19 years left on the lease, sell at auction for £120k.

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£120,000 - in London, that is very, very cheap. Probably at a huge discount to cover the cost of obtaining the freehold. Also, sold at auction - probably to cash buyers only as it was practically unsellable to anyone else.

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In answer to your first question: it's an extra 99 years.

Wrong. It's ninety years, if the extension is based on statutory rights: s.42 of the Leasehold Reform Housing and Urban Development Act 1993.

 

---------- Post added 22-07-2016 at 14:54 ----------

 

Well you may not own the land the property is on, but you still own the bricks and mortar.

Again, no. Having no lease left means having no ownership at all.

 

---------- Post added 22-07-2016 at 14:56 ----------

 

Simple - don't buy a house with a short lease! Or if you already own one get it extended or bought long before it hits the 80 year mark.

My house is leasehold -850 years on it.

 

I wouldn't consider a house with less than 80 years unless it was significantly reduced in price - enough to cover the cost of purchasing the freehold.

For houses, the 1993 Act does not apply.

Instead, the Leasehold Reform Act 1967 gives the leaseholder the right:

a. to enfranchise (= purchase the freehold reversion and any intervening leasehold reversions); or

b. (less commonly) to extend the lease by adding fifty years to the unexpired term.

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I've just watched an episode of 'Homes UT Hammer', where a couple were able to extend the lease of their recently aquired flat by only 25 years, bringing it up to a 99 year lease which allowed them to flip the property.

That was decent of the freeholder to allow them to extend the lease by only 25 years, rather then the usual 90 years, AND not have to make them wait two years in the process.

Edited by poppet2

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OK. But any transaction can be arranged if the parties come to terms acceptable to both.

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