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How to calculate cost of lease extension?

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If you purchase a property at auction and there are less than 30 years remaining on the lease, is there any way to find out how much it would cost to extend the lease?  I ask because all the websites that use the leasehold calculator, don't allow for calculations of less than 60 years remaining on a lease. 

When looking at auction properties with short leases, it's impossible to calculate how much the lease extension could cost, when deciding whether to purchase. 

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i would think the first thing any body should do if buying a house at auction with a short lease is, check that the lease can be extended.

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But why shouldn't it be? Also, wouldn't any leaseholder have the right to require this? 

Or are you thinking of people who bought  RTB council flats years ago, that the council now want to demolish, as was the case on 'Homes under the hammer', on Friday? 

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The Leasehold Reform Act 1967 (the 1967 Act) gives leasehold tenants of houses the right to buy the freehold. The right to compulsorily purchase the freehold (and any intermediate leasehold interest) is termed enfranchisement. Some freeholders will sell the freehold without the need for a formal claim, but, whether a claim is made or not, the leaseholder should obtain professional advice to find out roughly what the whole process will cost.

Because the basic right has been extended over the years by various amendments made to the 1967 Act, the rules for calculating the price are somewhat complicated.

 

https://www.lease-advice.org/advice-guide/leasehold-houses-valuation/

 

The 1967 Act provides two distinct bases for the valuation of houses under the Act. These are generally referred to by the relevant section of the 1967 Act, as follows:

Section 9 (1) – the house will be valued according to the original valuation basis, that is, the value of the site.

Section 9 (1A), 9 (1C) – the house will be valued according to the special valuation basis, that is, the value of the house, including a share of the marriage value.

The valuation method under which the house is to be valued is not a matter of choice by the landlord or the leaseholder but is determined by the qualification criteria.

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There is a sample calculation in the free guide ( based on site value  only  )  .

 

example: assume a house with 28½ years presently left on the lease, a fixed annual ground rent of £6.25 and an estimated freehold vacant possession value of £160,000.

 

The price to purchase the freehold came to £12,600.

 

 

A  second  example   calculation  ( Valuation by the special valuation basis )  :

 

A house with an unexpired term of 65 years and a rent of £50 a year has a vacant possession value estimated at £120,000.

 

The price to purchase the freehold came to £7,164 .

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The calculation   method   for  "cost of statutory  lease extension" can be downloaded from :

https://www.lease-advice.org/advice-guide/lease-extension-valuation/

 

But  calculation  method  may not  be  reliable   for a  lease term ,  fallen  below  30 years. 

 

So  you need to seek advice from  a  specialist  surveyor .

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Yes. A statutory lease extension under the 1993 Act has to involve serving the statutory Notice of Claim [s.42] which needs to incorporate the premium (= purchase price) offered for the new term.

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