Blog

View articles published in:
View posts tagged with:

Lease Extension Why Should I Bother?

Last Updated: 03/12/2014 09:14:26   Tags:



For a number of years most residential flat owners have had the right to extend their leases. There have been a number of legislative changes which have on the whole extended and simplified that right. As one would expect there are qualifying criteria to be met and special circumstances and exceptions. Nevertheless the right is very valuable and which should be considered sooner rather than later.

The main ones are as follows and it should be noted that there are a number of exceptions and special situations:


The flat must be held under a long lease i.e. one which was granted for a term of more than 21 years


The flat must have been owned by you for more than 2 years


It is no longer necessary for you to have lived in the flat. There is no residency qualification, only one of ownership.


So Why should I bother?

As the length of the unexpired term of the Lease decreases so does its value and therefore the value of your property.. If the Lease has, more than 100 years to run then this decrease may be negligible however there will become a stage when it will become much more relevant.


If a lease has less than 80 years unexpired when you seek to extend it then as part of the price you will have to pay what is known as a marriage value to the landlord. This could be significant. It is the main reason why you should consider extending sooner rather than later.


You may encounter difficulties if you want to sell your flat if the unexpired term is less than is regarded as mortgagable by most lenders. The will also therefore have a considerable effect on the type of purchasers you can attract and the level of value you would be able to achieve. Different lenders have different criteria but they are generally looking for an unexpired term of at least 65 years. There are special considerations applying to flats in certain prime Central London areas.


You will be able to extend your lease for a term of 90 years beyond the term remaining.  So if your lease is 60 years you would extend it to 150 years.  The ground rent is also reduced to peppercorn. (effectively you pay nothing for the whole new term).

The amount you will have to pay depends how long remains on your current lease. The valuation formulae are based on ground rents and yields and the length of the unexpired term.


As mentioned above it is very important that if your lease has less than 80 years left at the date you serve your Notice on the landlord you must also pay a marriage value which can considerably increase the price.

Because of the calculations involved It would be most sensible to have a formal valuation from a valuer specialising in this field. Castles Surveyors  have that expertise.  For the negotiations you need to have an idea of how much you are likely to pay and it is necessary to specify a price in the Initial Notice. If the price is unrealistic this could lead to your Notice being declared invalid.

 In addition to the price of the extension, you will also have your professional costs which will be those of your solicitors and surveyors and, in some more complex cases, possibly those of a barrister. Estimates should be obtained. Importantly, you should note that if you do serve a notice on the your landlord then you will be liable for the reasonable costs of the landlord in connection with any investigation the landlord is required to carry out, obtaining a valuation of your flat, and negotiating and granting a new lease to you.

There will also be the usual payments to third parties as with any conveyancing transaction including Stamp Duty Land Tax (depending on the price you pay), Land Registry fees and other incidentals such as search fees. As this is a specialist area any professional fees are unlikely to be cheap.  You should therefore obtain a legal adviser who is used to dealing with these matters.  Castles Surveyors can recommend the right person for you.

 The ultimate cost will depend on a number of factors including the complexity of the transaction and how long it takes and importantly whether or not it is necessary for the matter to be referred to the Leasehold Valuation Tribunal.

In most instances claims to enfranchise are resolved by negotiation between the valuers for each party. In those cases where there is a dispute as to entitlement or the price cannot be agreed then the matter can be referred to the Leasehold Valuation Tribunal. This can be a lengthy and expensive process. Although, as mentioned above, you are required to pay the reasonable costs of the landlord you are not liable for the costs of the landlord in respect of any proceedings before the LVT, except where the LVT determines that an application should be dismissed or one party has acted unreasonably in the proceedings.

image image

What do I get in a Survey?

image

Last Updated: 04/12/2014 13:46:42   Tags:



I am often asked ‘what do I get in a survey’ in other words people really want to know what they are getting for their money.  It always seems a lot but generally in terms of the price of the property it amounts to around 1% - 2% of the purchase price.  When buying a property one does not look at it per-se but just makes an emotional decision to buy. The difference with a surveyor is that he looks at the property dispassionately element by element without the emotional baggage.

So how do I approach a survey? In examining a building I look at it element by element following a mental checklist the basis of which is below


EXTERNAL


Chimneys:   

No of pots capped?
Plumb?
Bricks good?
Well Pointed?
Flashings – type condition?


Pitched Roofs: 

Covering?
Ridge line – straight, tiles well bedded?
Hips  - No sag? – tiles well bedded ?
Slopes – No sag? –condition of slate/tiles? – Missing, chipped, delamination
Vented?
Flashings – type condition?


Flat Roof:

Covering?
Condition?
Flashing? - type condition?
Cold or warm?
Ventilated?

Rainwater: 

Gutters Type- wooden, PVCu, Asbestos, Concrete Aluminium
condition- leaks –stains  
 
Downpipes:
 
Type- condition- leaks –stains, dressed into drain?

Walls: 

Type- construction  Plumb?
Any cracks –reflected internally- ongoing?
Bricks- condition? Rendered? Any hollowness? Well pointed?
DPC – original type? Injected?
Airbricks- sufficient?
Foundations – cellar etc.

Windows: 

Type- wooden, PVCu, Aluminium, Skylight
Double Glazed? Single Glazed?
Any rot to sills?
Well fitted?
Do they open? How well? 

Doors: 

Type- wooden, PVCu, Aluminium, Skylight
Double Glazed? Single Glazed?
Any rot to sills?
Well fitted?
Do they open? How well? 
 
Other Joinery: 

Type- wooden, PVCu, Asbestos
Facia’s Soffits Other flats?

Decoration: 

General condition, paintwork etc.


INTERNAL


Roof Void: 

Construction – traditional, Trussed, Steel, MMC
Condition – Rot- woodworm- bowing- shakers Sarking?
 Daylight – Damp penetration,
Insulation – depth
Boarded
Tanks? – Well supported?
Loft Rooms  - RSJ ? B regs?

Ceilings: 

Type – Lath and Plaster – Plasterboard- Fibreboard – Asbestos – Solid Condition – level, no sag, cracks- Why?
Cornices 
Covering- Paper, polystyrene tile?

Walls: 

Construction – Solid - Stud – Lath and plaster – Supporting
Plumb?  Even? Hollowness?
Cracks- Why – External?
Coverings – Paper – Tile- Any looseness- grouting

Damp: 

All internal wall for rising and penetration
Lower walls- beneath windows- under flat roofs
Reason – rising, penetrating, condensation.

Fireplaces: 

Breasts intact? – if removed well supported?
Blocked? Vented? Relined? Living gas Fire? Boiler flue –Capped?

Floors: 

Type – Suspended Timber, Solid, Pot and Beam, Cassette,
Condition – level- any bounce/hollowness?  
Covering –condition- Health and safety?
Sound Proofing?

Woodworm: 

Any Sign- active? Guarantees?

Woodwork:  

Doors- type, well fitted? flush into frames? Operate ok? Latches? Safety glass?
Stairs – level? firm? banisters firm? Steep? Covering good? (H&S)
Kitchen- Condition- Doors and Drawers ok? worktops, grouting
Fitted wardrobes - Condition- Doors and Drawers ok?
Skirting, architraves, General Condition

Decoration: 

Condition
 
SERVICES

Electricity: 

Meter- where? - Consumer Unit where?
RCD? MCB? Bonding –Switches and sockets Ok? Properly fitted?

Gas: 

Meter where? What does it service? Any obvious problems- smells? Certificate?
 
Water: 

Stopcock – where? Meter?
Type of pipework- leaks? Taps and flushing ok?  Flow Rate? Tanks- Condition 
Bathroom – Condition- adequate?  Leaks?

Heating:

What Kind, Boiler – Combi? Condensing? Radiators- TRV’s? Leaks- Flue type?
Storage radiators? – Air?  Underfloor?

Drainage: 

Type of Pipework, condition-leaks, benchwork, Inspection chambers- blockage- Combined? Shared?


EXTERNAL

Boundaries Path, Garages- Construction ? Condition? Trees? – Type – influencing?


Looking at the property in this way gives an overall impression. Of course looking is not really enough, you have to know what you are looking at and I have over 20 years experience in residential  property 

The check list is not complete;  The area in which the property is situated matters such as nearby rivers or streams or other detrimental factors are taken into consideration and any matters that would require further investigation by your legal advisers also have a bearing.

The level of inspection does not differ in creating either a Homebuyers Survey or a Building Survey.  The difference comes in the depth of reporting and the advice given.

I hope this gives some idea about what you get for your Homebuyers or Building Survey and the advisability of obtaining one after all it could save you money. Either in the short term by enabling you to renegotiate the purchase price or in the longer term by preparing you for likely repairs.

Further advice can be obtained by contacting Castles Surveyors Ltd on 020 8804 5678 or by Email on enquiries@castles-surveyors.co.uk

image image

Why should I have a Survey?

Last Updated: 23/01/2015 15:25:05   Tags:

Buying a property or moving house is considered to be one of the most stressful things you ever do.

Most people who buy a property do so within five or ten minutes of seeing it, for them it is an emotional decision rather than an economic one. There are very few purchases made in this way especially when you consider that it is normally the most money you will spend in your life for a single purchase.  Why then do something like 85% of purchasers rely on the valuation carried out for the lender.  This is, as the word implies, a VALUATION it is NOT a survey.

In carrying out a valuation for the lender, the valuer will highlight any major problems that would affect the lenders security such as major cracks, damp or severe timber defects that would affect the stability of the building and therefore its mortgage ability but, that is all. The valuers responsibility is to the bank and not to any great extent to the purchaser. 

Whilst I can appreciate that money is tight, surely its makes sense to have a more detailed examination of a property, such as a Homebuyers Report or a Building Survey so that you are aware of any shortcomings and expense that you may incur when you move into your new home. The costs vary according to the size of the property and the type of survey required, but, are relatively cheap when considered with the purchase price and the potential of unexpected expense at a time when you have usually spent more than you intended in the first place.

The surveyors job is to provided an impartial assessment of the property without the emotional attachment that you, as the prospective purchaser, already have.  Part of the problem, I believe, of the proliferation of Home Improvement and Be your own Property Developer type TV programs that we have seen in recent years.  These give a false impression of property in general and lead people to believe that everyone is a property expert  i.e  I’ve done a bit of alteration on our house I’ll have a look for you.

There is however, no substitute for experience. All of the surveyors at Castles Surveyors are either FRICS or MRICS none of them with less than 20 years in property related matters.

So which type of survey:

 A Homebuyers Report is normally recommended for flats or more modern houses in apparently good condition.  It is what the Royal Institution of Chartered Surveyors terms as the ‘Economy’ report.  It is in a standard format and covers all the major elements of the property in a brief statement. It gives a clear indication by way of condition ratings to each element. It also provides a valuation.

The Building Survey is a much more detained report in a free format. It is recommended for older property or those in apparently poor condition.  It also examines the building element by element, but goes into much greater depth than the homebuyers and, if required, will provide estimated costings.  The Building Survey does not ordinarily contain a valuation.

Further information can be obtained from The Royal Institution of Chartered Surveyors.


If you have any further enquiries or we can assist in any way please do not hesitate to contact us. Anyone at Castles Surveyors would be pleased to help.

image image