Hey Everyone! I hope this video explains the government's proposals for the Leasehold reform in a bit more detail. It's an interesting topic as it will affect millions of people if it goes through. Put your questions or thoughts down below👇🏻
Thanks for the video. The change in leasehold reform can’t come soon enough. A relative of mine lives in a converted house (only 2 flats) where both owners own a share of the freehold but the underlying leases are under 80 years. If either wanted to extend the lease they would have to pay each other marriage value. Both of them want to move on. However, they’re stuck because neither wants to pay marriage value to the other. Robert Jenrick should get on with it.
Hey! Loving the videos! I was wondering whether you could do a video on how age can impact getting a mortgage especially for first time buyers? Keep them coming!
Hey Adrian! Thank you for the comment, really appreciate it 😁 Yeah definitely, I'll be doing a mortgage video soon, so I'll cover that in there, thanks for the suggestion, glad you're enjoying the videos!
Thank you George! Appreciate the nice comment 😊 I'll definitely keep going, my aim is to help out as much as I can! If you have any specific requests or topics you'd like me to cover, do let me know.
Great video! I got a mortgage out on a flat that had 87 years on it back in December. The lease extension was £11k all in. This lease extension news broke and I stopped the transaction as I thought it might be cheaper down the line. 7 months on I'm a bit of a loss? Do you think that was the right decision or should I continue to wait?
Hey Thomas! Thanks for the feedback and your comment. I think the best thing to do in this situation is get the lease extended now. The reason is say that is because when the unexpired term of a lease is over 80 years, there is no marriage value to pay. If the reform happens within the next 6 years, then changes still wouldn't benefit you, as it focuses on the abolition of marriage value which wouldn't have applied in your case. The longer the lease is left to expire, generally the more expensive it gets to extend. The changes arent huge when the lease is over 80 years, but once it drops below 80, the premium jumps up quite a bit with each year that passes. If you're still looking to buy a flat i would say the preferencial order to look at would be: 1. Flats with a 999 year lease and share of freehold with no ground rent. 2. Flats with a lease that was extended under the act - these will typically be 140+ years with no ground rent 3. Flats with a lease over 80 years with a ground rent Lastly, if you find a nice flat but its option 3, then be sure to have the current sellers solicitors serve a section 42 notice between exchange and completion, otherwise you'll have to wait 2 years before you can extend your lease. I hope that helps! All the best
@@RWProperty Thanks for such a great response! Interesting, I assumed when the news broke that it was also looking to cheapen the high lease rates landlords were giving. I got into a deal with the previous owner, who contributed some money to the lease before the sale and got the lease extension process starting her end. Shortly after the news broke, I pulled out of the lease extension deal as I wanted to wait and see what happened; I would hate to pay £11k on the lease extensions only to be cheapened or abolished later down the line. In doing so, I now have to wait 2 years to extended regardless; by then, my lease will have 85 years left. The initial rate the landlord gave was £13k, I appealed this and came back to £11k which was still too high after paying for a mortgage deposit. However, I've heard the government is looking to implement a new online system that shows the correct lease amount you should pay rather than the landlord pulling a number out of the sky, which might be worth waiting for again. Either way, in 2 years, my lease will have 85 years left on it. Do you think it will be higher than £11k? The property initially brought for £145k in 12/20. I appreciate any advice. Your videos are concise and way easier to understand! Great work
Hi I'm thinking of buying a flat in Wolverhampton for £45.000 but it has only got a 51 year lease am I doing the wrong thing or could someone tell me how much the lease would cost to renew would I get it done for about 17 grand 👍
Hey Alun, Theres no specific implications of buying a flat with a new lease this year, as long as the lease is 'long enough' i.e over 100 years in my opinion, then theres not much to worry about. If you're referring to how buying a flat this year could be impacted by the possible changes to leasehold reform in the future, then its hard to say. If the changes go through, i think the prices of leasehold properties will increase overall, but the changes will only really help people out with significantly short leases (i.e below approximately 70 years). Also, if youre buying a flat this year, beware of any onerous ground rent clauses in the lease... Anything that doubles in short time periods or is RPI linked every 10 years can cause a problem when trying to get mortgage finance. Hope that helps!
@@RWProperty yes thanks, that certainly helps. I guess my biggest concern is being tied into yearly ground rent when other comparable properties no longer have to pay it. I guess this is offset by the sale price likely being cheaper. Do you think this would impact the ability to sell this property later? (either still with a lease over 100 years or under)
Hey Anna! Yes, just a little bit 😅 That's why it's very important to extend a lease before it gets to 80 years. If you know of anyone who owns a flat or is looking to buy a flat, pass on the knowledge
@@mazzgoldie9149 Hey Mazz, apologies for the late reply, but I'll try to help here. With a 42 year lease it's very tricky, but he essentially has 3 options. 1. Leave it, but he's then essentially losing value in the property day by day.. Once the lease reaches 0, the property reverts to the freeholder and he'll no longer be the owner - that's the worst case scenario 2. He can extend it via a statutory notice known as a section 42 notice. This will involve having the lease extension valued, then paying a solicitor to serve the notice. This can be an expensive process especially since the lease is 42 years. Depending on the value of the flat and the location, it could easily be over £50,000 to extend. Try an online calculator to see what the rough cost would be. Let me know if you need any help with that, I could guide you. 3. He could write to the freeholder to seen if they're willing to extend the lease back to 99 years for example. This can normally be cheaper that a statutory extension. You may have to pay the freeholders valuation fee though and there's no guarantees here. This is a complex area of property. Message me or email me if you'd like to know more - rwpropertychannel@gmail.com
@@RWProperty Thank you for getting back to me. I think I'll try and get a rough price with an online calculator just so I know roughly what price it will cost to extend. He's got a 2 bed ground floor maisonette in Coventry which would be worth around £95,000-£100,000 if the lease was over 99 year's. God knows how little it must be worth now. I just hope he can afford to extend it or it will be worth a fraction of what it should be I'm guessing
@@mazzgoldie9149 No problem at all. Yeah definitely have a look at the online calculator to get a rough idea, if it's something he can afford, I'd definitely consider extending because it'll protect the asset from further depreciation. Typically in the open market, the way these things are calculated is taking the long lease value, say £100,000 and then deducting the cost of the lease extension (which you'll check online), the costs i.e. Professional fees (another £5k for example) and then some profit on top, (say £10k), that'll then give you a rough idea of what it's worth today. If you need anything else, do let me know!
Hey Everyone! I hope this video explains the government's proposals for the Leasehold reform in a bit more detail. It's an interesting topic as it will affect millions of people if it goes through. Put your questions or thoughts down below👇🏻
Thanks for the video. The change in leasehold reform can’t come soon enough. A relative of mine lives in a converted house (only 2 flats) where both owners own a share of the freehold but the underlying leases are under 80 years. If either wanted to extend the lease they would have to pay each other marriage value. Both of them want to move on. However, they’re stuck because neither wants to pay marriage value to the other. Robert Jenrick should get on with it.
Hey!
Loving the videos!
I was wondering whether you could do a video on how age can impact getting a mortgage especially for first time buyers?
Keep them coming!
Hey Adrian! Thank you for the comment, really appreciate it 😁
Yeah definitely, I'll be doing a mortgage video soon, so I'll cover that in there, thanks for the suggestion, glad you're enjoying the videos!
Very interesting, thanks for sharing.
I came from reddit but stuck around to watch a few of your videos.
Keep up the good work.
Thank you George! Appreciate the nice comment 😊 I'll definitely keep going, my aim is to help out as much as I can! If you have any specific requests or topics you'd like me to cover, do let me know.
Great video! I got a mortgage out on a flat that had 87 years on it back in December. The lease extension was £11k all in. This lease extension news broke and I stopped the transaction as I thought it might be cheaper down the line. 7 months on I'm a bit of a loss? Do you think that was the right decision or should I continue to wait?
Hey Thomas!
Thanks for the feedback and your comment.
I think the best thing to do in this situation is get the lease extended now. The reason is say that is because when the unexpired term of a lease is over 80 years, there is no marriage value to pay. If the reform happens within the next 6 years, then changes still wouldn't benefit you, as it focuses on the abolition of marriage value which wouldn't have applied in your case.
The longer the lease is left to expire, generally the more expensive it gets to extend. The changes arent huge when the lease is over 80 years, but once it drops below 80, the premium jumps up quite a bit with each year that passes.
If you're still looking to buy a flat i would say the preferencial order to look at would be:
1. Flats with a 999 year lease and share of freehold with no ground rent.
2. Flats with a lease that was extended under the act - these will typically be 140+ years with no ground rent
3. Flats with a lease over 80 years with a ground rent
Lastly, if you find a nice flat but its option 3, then be sure to have the current sellers solicitors serve a section 42 notice between exchange and completion, otherwise you'll have to wait 2 years before you can extend your lease.
I hope that helps!
All the best
@@RWProperty Thanks for such a great response! Interesting, I assumed when the news broke that it was also looking to cheapen the high lease rates landlords were giving. I got into a deal with the previous owner, who contributed some money to the lease before the sale and got the lease extension process starting her end. Shortly after the news broke, I pulled out of the lease extension deal as I wanted to wait and see what happened; I would hate to pay £11k on the lease extensions only to be cheapened or abolished later down the line. In doing so, I now have to wait 2 years to extended regardless; by then, my lease will have 85 years left.
The initial rate the landlord gave was £13k, I appealed this and came back to £11k which was still too high after paying for a mortgage deposit. However, I've heard the government is looking to implement a new online system that shows the correct lease amount you should pay rather than the landlord pulling a number out of the sky, which might be worth waiting for again. Either way, in 2 years, my lease will have 85 years left on it. Do you think it will be higher than £11k? The property initially brought for £145k in 12/20.
I appreciate any advice. Your videos are concise and way easier to understand! Great work
Hi I'm thinking of buying a flat in Wolverhampton for £45.000 but it has only got a 51 year lease am I doing the wrong thing or could someone tell me how much the lease would cost to renew would I get it done for about 17 grand 👍
Very interning video
Thank you Stuart!
What are the implications for someone looking to buy a flat with a new lease this year?
Hey Alun,
Theres no specific implications of buying a flat with a new lease this year, as long as the lease is 'long enough' i.e over 100 years in my opinion, then theres not much to worry about.
If you're referring to how buying a flat this year could be impacted by the possible changes to leasehold reform in the future, then its hard to say. If the changes go through, i think the prices of leasehold properties will increase overall, but the changes will only really help people out with significantly short leases (i.e below approximately 70 years).
Also, if youre buying a flat this year, beware of any onerous ground rent clauses in the lease... Anything that doubles in short time periods or is RPI linked every 10 years can cause a problem when trying to get mortgage finance.
Hope that helps!
@@RWProperty yes thanks, that certainly helps. I guess my biggest concern is being tied into yearly ground rent when other comparable properties no longer have to pay it. I guess this is offset by the sale price likely being cheaper. Do you think this would impact the ability to sell this property later? (either still with a lease over 100 years or under)
when will this actually become law?
Below 80 years you are fooooked
Hey Anna!
Yes, just a little bit 😅
That's why it's very important to extend a lease before it gets to 80 years. If you know of anyone who owns a flat or is looking to buy a flat, pass on the knowledge
@@RWPropertyI think my grandads maisonette has only 42 years lease left 😔😔. What can he do? Please any info would be great
@@mazzgoldie9149 Hey Mazz, apologies for the late reply, but I'll try to help here.
With a 42 year lease it's very tricky, but he essentially has 3 options.
1. Leave it, but he's then essentially losing value in the property day by day.. Once the lease reaches 0, the property reverts to the freeholder and he'll no longer be the owner - that's the worst case scenario
2. He can extend it via a statutory notice known as a section 42 notice. This will involve having the lease extension valued, then paying a solicitor to serve the notice. This can be an expensive process especially since the lease is 42 years. Depending on the value of the flat and the location, it could easily be over £50,000 to extend. Try an online calculator to see what the rough cost would be. Let me know if you need any help with that, I could guide you.
3. He could write to the freeholder to seen if they're willing to extend the lease back to 99 years for example. This can normally be cheaper that a statutory extension. You may have to pay the freeholders valuation fee though and there's no guarantees here.
This is a complex area of property. Message me or email me if you'd like to know more - rwpropertychannel@gmail.com
@@RWProperty
Thank you for getting back to me. I think I'll try and get a rough price with an online calculator just so I know roughly what price it will cost to extend. He's got a 2 bed ground floor maisonette in Coventry which would be worth around £95,000-£100,000 if the lease was over 99 year's. God knows how little it must be worth now. I just hope he can afford to extend it or it will be worth a fraction of what it should be I'm guessing
@@mazzgoldie9149 No problem at all.
Yeah definitely have a look at the online calculator to get a rough idea, if it's something he can afford, I'd definitely consider extending because it'll protect the asset from further depreciation.
Typically in the open market, the way these things are calculated is taking the long lease value, say £100,000 and then deducting the cost of the lease extension (which you'll check online), the costs i.e. Professional fees (another £5k for example) and then some profit on top, (say £10k), that'll then give you a rough idea of what it's worth today.
If you need anything else, do let me know!