I am in the process to attempting to get and 999year extended leasehold on a flat, which is at present jointly owned by myself, brother and sister. Its present lease runs out in 44years time.

We have been advised that the cost of doing so is a fair amount more than we expected.

We have been told that the figures arrived at, is based on a Multiple or Conversion ratio times the value of property and length of lease left to run.

If any has experience of the above process and could give me the ratio, or from their experience the probable valuation factor for a property of approximately 150,000 I would be grateful.

Thank you.

.

Fred1new

There are a numbr of fcators to tke into account here.

Are you or one of your siblings resident in the flat?
How long have you owned the flat?
Why a 999yr lease, in theory you are entitled to 90 YR extension thus giving 134 yrs unexpired and to pay nil ground rent under the new lease (assuming you pay a ground rent).
The calculation is basically the landlords loss of ground rent for the next 134 yrs on an YP calc.
plus diminuation in value of the landlords loss of the value of the flat in 44 yrs time against 134 yrs time. So if the flat with a good lease is worth 150K get a yp valuation of that in 134 yrs time. The LL would be entitled in theory to the flat back in 44yrs time and so what is the value to him of that loss.

The flat will be worth more with a 134 yr lease and so the LL is entitled to a share in that increase in value usually 50%.

So the LL gets 3 compensation payments in theory, 1 for loss of ground rent, 1 for loss of flat back in 44 yrs and 1 for a share in the incresse in market value he is giving you.

that is a bit basic but essentailly is it.

The 999 yr ext you are after will perhaps increase the value further though not by much, nevertheless the LL may argue that he only has to give a 90yr ext and what you are after is much more and thus of higher value. If you are content with a 134 yr lease then you at least get back in the driving seat as you are conceeding some negotiation ground to him.

Your problem is that few buyers would look at flat with 44 yrs becasue the lender will want at least 50 yrs left on the basis that if the buyer defaulted and they had to repo the flat in 20yrs then a 30yr lease would give the new buyer's lender little comfort.

So as you are below the 50Yr unwritten threshold then you are a bit on the back foot.

In the end this is not an exact science and comes down to market conditions, local values and strong negotiating tactics. You are probably worth getting a good local surveyor to act for you, it may cost you 1000 but could save you 5000.

try http://www.lease-advice.org/

Barney, Thank you for your help. We are thinking along the lines you suggest.

Best wishes.

Fred