poppet2 Posted December 22, 2018 Share Posted December 22, 2018 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. Link to comment Share on other sites More sharing options...
kidley Posted December 22, 2018 Share Posted December 22, 2018 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. Link to comment Share on other sites More sharing options...
poppet2 Posted December 22, 2018 Author Share Posted December 22, 2018 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? Link to comment Share on other sites More sharing options...
topflat29 Posted December 25, 2018 Share Posted December 25, 2018 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. Link to comment Share on other sites More sharing options...
topflat29 Posted December 25, 2018 Share Posted December 25, 2018 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 . Link to comment Share on other sites More sharing options...
poppet2 Posted December 26, 2018 Author Share Posted December 26, 2018 But this is a flat, so would your response still apply? Link to comment Share on other sites More sharing options...
kidley Posted December 26, 2018 Share Posted December 26, 2018 8 hours ago, poppet2 said: But this is a flat, so would your response still apply? Would this be of interest? http://www.leaseholdadvicecentre.co.uk/Lease Extension.htm Link to comment Share on other sites More sharing options...
topflat29 Posted December 29, 2018 Share Posted December 29, 2018 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 . Link to comment Share on other sites More sharing options...
Jeffrey Shaw Posted December 30, 2018 Share Posted December 30, 2018 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. Link to comment Share on other sites More sharing options...
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