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Pauly_Boy

How Much To Extend A Lease?

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I'm goign to look at a flat where the lease is only 66 years. Oviously this needs extending and tbh I'm not even sure I could get a mortgage on it!

Anyway, how much does it usually cost to extend a lease as I've heard massively different stories. The Property value is about £150k.

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I'm goign to look at a flat where the lease is only 66 years. Oviously this needs extending and tbh I'm not even sure I could get a mortgage on it!

Anyway, how much does it usually cost to extend a lease as I've heard massively different stories. The Property value is about £150k.

Think this calculator is about right, but I'm not quite sure how to use it:

http://www.tenancy-agreements.co.uk/lease.php

A peppercorn rent is £10 a year I think.

Edit: Having a play maybe £10-£15k?

Edited by GARCH

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if you PM me i could send you a spreadsheet i knocked up a while back.

basically what you'd pay would have three components.

(1) compensating the freeholder for the fact that he's due £150k in 66 years' time ['reversion'] - you have to use a 5% discount factor here - I make that abt £6k for you.

=(1+Improvement_999_yr_lease)*1000*current_value/(1+yield_reversion)^years_unexpired

(2) compensating the freeholder for foregonig 66 yrs of ground rent - you need to know how much this is.

=(ground_rent_pa/capitalisation_ground_rent)*(1-(1/((1+capitalisation_ground_rent)^years_unexpired)))

(3) compensating the freeholder for the increase in the value of the flat arising from the grant of a new lease ['marriage value'] - this i'm less sure of - it'll be a fair few grand though.

=IF(years_unexpired<80,share_marriage_value*((1000*current_value*(1+Improvement_999_yr_lease)-SUM(E5:E6,1000*current_value))),0)

so over £10k in total i should think.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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