• Buying Short Lease Property

    By Guest on 20th Dec 2016

    I'd like to buy a flat which has a very short lease - 52years. The lease extension will cost 48k for this property. The seller would be happy to extend the lease but only if buyer pays for it. I have 50k saved to be used as a deposit, but if I use it to extend the lease I won't have a deposit. Is it all possible to arrange like this: We both enter the buying process. I will pay seller deposit of 50k, which they will have to use to extend the lease. Once the lease has been extended, I will apply for mortgage(full price including extension). Basically is it possible to use deposit to extend the lease? Or is it possible to approach this issue some other way?

    thanks

    pavol

  • 1 Answers

    By Guest on 20/12/2016

    Ordinarily you would agree to buy the property for £X, being the purchase price plus the cost of the lease extension. So say the property is worth £100,000 with a 52 year lease and the extension costs £48,000, The purchase price would be £148,000. The lender would value the property on the basis of the new, extended lease. Prior to exchange of contract the seller would agree the terms of the lease extension with the landlord including the price then on the day of completion the seller's solicitor would be holding the new lease signed by the seller and landlord's solicitor would be holding the new lease signed by the landlord. Your solicitor would send the £148,000 purchase price (less any deposit already paid on exchange) to the seller's solicitor and he would send £48,000 to the landlord's solicitor as well as his client's signed new lease. In return the landlord's solicitor would send the lease signed by to the landlord to the seller's solicitors who would in turn send it to your solicitors who would register it at Land Registry on your behalf. This avoids the need for the lease extension to be paid for before completion of your purchase

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