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First of all I will like to thank the creators of this platform and all the members for sharing all the valuable information on here.
You will not believe how much knowledge I have gathered just by reading on this platform. Once again thank you.
To my question
I am looking to make maximum of £180K offer on a 2 bed flat in Reading for residential purposes that is on the market for offers in excess of over £200K. The property has been on the market since July 2018, and I am told the vendor is selling due to space as they have 2 kids and they feel the flat is now too small.
At the viewing the estate agent mentioned that the lease was about 107 years. When I followed up for confirmation by email, he then confirmed that the lease was 97 years. At the viewing, I made the agent aware that I don't intend to pay more than £180K for the flat for a number reasons including Brexit, depressed market prices and the fact that the house is close to a main road.
Any help will be appreciated, thank you.
Danger point starts when lease duration falls to around 80 yrs - an extension now may cost up to say £10k allowing for you paying legals for both sides - you and freeholder - but you cannot start that process until 2 yrs after ownership.
If you want a longer lease get current owner to start process if offer is accepted.
There are online estimators for lease extensions.
Main road property often sells for 10/15/20% less than same on a side road - though the higher up you are the less the traffic noise - but I would be wary if adjacent to anything like a dual carriageway which could be busy almost 24 hrs daily.
At 80 yrs duration marriage value kicks in and makes extension far more costly - and few mortgage lenders will lend thereon so you are left with cash buyers only and poor resale price as a result.
Thank you so much for your help.
1. A good flat in a good block/area will always sell regardless of lease remaining and you have 97 years left which is fine. Only when it gets 85 yeas and below the price to extend will get expensive.
2. Lease extension will vary according to area ie London and the flat but anything from 3k to 10k, you could ask the current seller to start the process otherwise you need to own the flat for 2 years.
3. I would start with a offer of 180k first and see where that goes.
Thank you Adam
Please join the "National Leasehold Campaign" on facebook plenty of research done on LH houses/flats also hidden added annual fees etc
The answer really depends on the ground rent. For example at £25pa I would estimate the extension premium would be around £2.5k.
Ashley ConnellLease Extension Solicitor at Hetts