Nathan Says Relax

September 21, 2016 by Rob Kahl

Nathan Says Relax

Do you remember the 1980’s? Puff ball skirts, hot hatches, mobile phones the size of bricks, big hair, shoulder pads and of course the best decade for music ever including Frankie Goes to Hollywood, Wham and of course Duran, Duran.

Unfortunately some people are still suffering the hangover.

Another big thing that happened in the 1980’s was a Margaret Thatcher induced property boom. This saw an explosion in large Victorian properties being snapped up by canny developers and converting them in to flats to sell on to the ever panicked buyers desperate to get on to the housing ladder.

Everything was rosy, people managed to buy flats for £20,000 or even less, developers made a few quid and the market has continued to grow so that now those conversion flats are extremely desirable and worth a fortune.

There is one problem.

To you and me the 1980’s feels like only yesterday. I remember finishing school in 1989 and joining the Royal Navy, the world was my Lobster. Unfortunately it was actually 30 years ago!

Those Victorian houses that were converted in to flats turned from a single freehold property to a number of different leasehold properties. Nobody really understood the implications of this (many, including me still don’t fully understand it) but they were all bought with 99 year leases so nobody really thought about it, 99 years is ages, isn’t it?

Well if you are in one of those converted flats and you have never even thought about your lease or looked at your paperwork since you bought the property you could be in for a shock. If you bought your flat in 1985 for £20,000, yes it could quite conceivably be worth £200,000 now but you might also only have a lease of 68 years!

You may quite rightly say that 68 years is still a long time and you would also be right in saying that it would certainly see me out but if you want to sell the property the you will most likely have to do something about it.

The problem is mortgage companies. There are very few that lend against properties with what they deem as short leases. As a rough rule of thumb most mortgage lenders like at least 3 times the term of the mortgage they are lending against the lease. For example if your prospective buyer is applying for a 25 year mortgage then their mortgage company wont touch it with a lease of anything less than 75 years and with mortgages now readily available over 30 & 35 years it makes it even more difficult.

Any conveyancing solicitor worth his or her salt will also bring it up with your prospective purchaser. It will either have to be dramatically reflected in the price you are selling your flat for or will end up in long protracted negotiations with your freeholder and both sets of solicitors.

Basically, dig out your old dusty paperwork, check the term of your lease and if there is anything less than 80 years left you will have to do something about it.

As you can probably imagine though, I can help you out if you have a short lease or can’t even find your paperwork. It is not all doom & gloom I am sure we can find a light at the end of the tunnel.

We have recently employed Nathan D’Alessandri (I can’t pronounce it either!). He specialises in lease extensions and negotiations and basically understands all the bits that I don’t.

He will look at the terms of your current lease, advise you as to whether you need to do anything about it, negotiate directly with your landlord or freeholder and hopefully be able to cut through the jargon and tell you in simple plain non-solicitor speak what you may or may not need to do.

This is a service that we at Scott & Stapleton are seeing a growing demand for and unfortunately is one of those things that the longer you leave it will undoubtedly cost you more money.

Why not give him a call at the office and he will make you a cup of tea or even visit his Facebook page for updates and industry news and hopefully allay your fears.

This article is by Rob at Scott & Stapleton.
Tel: 01702 471155

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