How do I increase the Lease on my 4 Nottingham Council flats?

How do I increase the Lease on my 4 Nottingham Council flats?

8:20 AM, 9th August 2021, About 2 months ago 30

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I have 4 flats (separate buildings) where the Council own the building (Freehold-Is that right?). I pay service charge approx £100+ each flat each year + Estate rent £10 each flat. No mortgages on each flat if that makes a difference.

My limited knowledge and notes on this tells me: Council have to extend Lease back to 99 years. I can’t get a mortgage if only 70 years are left. Do flat Leases when near 90 years renew.

One of them has about 92 years left. One has 88 years left. How do I find out how many years are left on each one without digging my deeds out?

I started the ball rolling yesterday, initial fee for a company is around £1800 inc. vat + the Council fees + I guess the Council costs.
The flats are only worth around £85,000 with rents of around £6000 pa, so it seems to start with, the fees are expensive considering the little value and rent.

If it makes a difference on what I’m doing with ’em in years to come, well initially I wanted to save them, so when my tenant’s kids in the houses left home and their Housing Benefit reduced, and they couldn’t afford the house anymore, I could say Here you go, I have cheaper flat for you here. And I’ve done that in the past with the flats.

However, at the moment, the people aren’t leaving the flats either. Apart from one where the girl just moved in and hopefully may buy it off me within 3 years. So if the flats do come up, as time ticks on, I think I am gonna’ sell them. As the house people now are saying they don’t want to leave their home no matter what and muggins here don’t charge ’em proper rent cause they can’t afford it.

Please don’t confuse me with complicated regs, I’m good at renting houses out and maths, but as soon as you say Section 27.2 Rule 7 (B) paragraph 2, you’ve lost me-I’m getting a plane to Magaluf.

Just simple what to do, phone number, expert etc. Or is it because it’s Council, they more gentle and can deal with ’em direct? However, my experience with a lot of departments in Council is any affiliated to the Councillors is not great.



Comments

by Mick Roberts

16:18 PM, 10th August 2021, About 2 months ago

Reply to the comment left by Laura Delow at 09/08/2021 - 09:12
Thanks Laura, so be good to get to 170 years as I've got one tenant, he says he's never moving.
This is just happening too.
https://www.moneysavingexpert.com/news/2021/01/shake-up-to-make-it-easier-and-cheaper-for-leaseholders-to-buy-t/
The changes will mean both house and flat leaseholders can extend their lease for a new standard period of 990 years - and crucially, if you do so, you'll then no longer have to pay ground rent.

by Mick Roberts

16:18 PM, 10th August 2021, About 2 months ago

Reply to the comment left by BernieWales at 09/08/2021 - 12:07
Thanks, I'll watch next few days.

by Mick Roberts

16:19 PM, 10th August 2021, About 2 months ago

Reply to the comment left by Jo Westlake at 09/08/2021 - 12:54
Thanks, so The Leasehold Advice Centre These I need to contact to.
Yes spotted this last few days:

https://www.moneysavingexpert.com/news/2021/01/shake-up-to-make-it-easier-and-cheaper-for-leaseholders-to-buy-t/
The changes will mean both house and flat leaseholders can extend their lease for a new standard period of 990 years - and crucially, if you do so, you'll then no longer have to pay ground rent.

by Mick Roberts

16:19 PM, 10th August 2021, About 2 months ago

Reply to the comment left by at 09/08/2021 - 20:22Aah more choices.
ALEP solicitor
Sounds like you've done what I need to do. Did u still have pay them £1950's + VAT even though u knew what u were doing?
£2300 seems a lot does it not for cheap flats?

by Laura Delow

17:55 PM, 10th August 2021, About 2 months ago

Reply to the comment left by Mick Roberts at 10/08/2021 - 16:18You're right - under the latest proposals:
All leaseholders who can extend their lease will have the right to do so by 990 years – and if you do, you won't have to pay ground rent. Many who extend their lease will pay less, (especially those with remaining lease terms of less than 80 years), as a number of charges involved in the cost of extending a lease or purchasing a freehold will either be capped or abolished.
BUT, these changes aren't yet law and they could be delayed or changed as they pass through Parliament, and there's no clear timescale for when the changes will become law – it could potentially be a few years.
If you really need to sell or remortgage, then you might not be able to wait until the changes take effect before extending.

by Laura Delow

18:03 PM, 10th August 2021, About 2 months ago

Reply to the comment left by Mick Roberts at 10/08/2021 - 16:19This £1950+VAT includes the valuation fee too which on its own would normally cost around £300-450+VAT in greater London.
There may be solicitor fees out there offering what looks like a sensible lower fixed fee, but when you probe what this fee covers, you might find yourself paying an additional an hourly rate for ongoing negotiations & checking contract drafts that can end up going back & forth.

by silversurfer2017

18:27 PM, 10th August 2021, About 2 months ago

Reply to the comment left by Mick Roberts at 10/08/2021 - 16:19
An ALEP solicitor will charge around £1000 + vat - ring round for quotes. You do not have to use a central London one as all communication is by phone. email or post. This included serving the Section 42 notice for a statutory leasing extension, dealing with the freeholders Section 45 counter notice and drawing up the new lease once you have agreed the lease premium. The first time I used a valuer and he was a waste of time. Charge £800 + vat for valuation + negotiating the lease premium with the freeholders valuer. Since found out he offered too high a price to get a quick transaction as he gets paid whatever the premium. The next time I used the same solicitor but did my own negotiations direct with the freeholders valuer and got a far better result.

by Mick Roberts

12:43 PM, 11th August 2021, About 2 months ago

Reply to the comment left by Laura Delow at 10/08/2021 - 18:03
So not only will I have the solicitors fee, I will also have a valuation. AAaaahhh more stuff to make us want to pack up.

My solicitor got back to me, they £650+ VAT, but I don't know what else they don't include.

by Mick Roberts

12:44 PM, 11th August 2021, About 2 months ago

Reply to the comment left by at 10/08/2021 - 18:27
So I can negotiate with the freeholders valuer then. Wow there is so much to do on this in't there.
I thought I'd just ask the Council, they say £1000 Mick to take it to 125 years job done.
I want another holiday to forget about this already.

by silversurfer2017

13:21 PM, 11th August 2021, About 2 months ago

Reply to the comment left by Mick Roberts at 11/08/2021 - 12:44Do not just increase you present lease to 125 years, believe me this is not in you best interest. You do not need a valuer but you definitely need a solicitor not only to serve the section 42 notice but to make sure your new extended lease does not have any nasty unwanted clauses inserted by the freeholder. Definitely go for a 90 year statutory extension with peppercorn rent. The council cannot by law refuse. If you do research you will find that the lease premium consists of 2 parts the first part is to compensate the freeholder for the loss of ground rent. This is calculated on what lump sum an investor would be prepared to pay at current interest rate for 90 years income with no capital return at the end of the 90 years. In other words the investor would be buying in effect an annuity which pays out for 90 years an then stops. At £10 a year a year ground rent no investor would pay more than £250 for this. (takes 25 years just to get your money back). So this is the first part of the lease premium. The other part of the premium is the reversion. This means that the freeholder has to wait a further 90 years before, in theory, he can get back the freehold plot your property is on. This is called the reversionary value an a formula invented by Sportelli is general used to work out the deferment rate, the waiting period for the extra 90 years. As a very, rough guide this works out at just over 0.1% of the value of you property. So if your property is worth say £500,000 then say £600 for the reversionary value + £250 for loss of ground rent. So £1000 should easily cover the lease premium. You will have to pay the Council's legal and valuation fees whatever you do so why settle for a bun when you can have a cake? Your property will be more valuable for resale with a 90 year lease extension and zero ground rent.


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