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You need advice on what the premium would be if you went down the statutory route. If the answer is 'about 5k or more' then go for it. But without proper valuation advice, you can't assess how good that offer is. Bear in mind that if you go down the statutory route the rent gets reduced to a nominal peppercorn rent, and I can't see any reference to rent in the proposed terms. A small amount every year for 170 years ends up being worth quite a lot when capitalised in advance.
Brommers-
All of the calculators I have used online with the value of the property set at the sale price in 2015 give a range of £5k to £8k for the premium. Not scientific, I concede that but the value of our flat has gone up quite a bit in that time and I am pretty confident that this is a low figure.
Our ground rent is £100 a year and we don't have any service charges so getting rid of it would only really be an admin saving more than anything (have to pay by cheque once a year). If the letter/offer makes no reference to rent I will ask that at the very least it is frozen at the current rate. I will not be paying it for 170 years.
Thanks for the response and advice, I really appreciate being able to write this out.
stevo_com
Cross post from the Owning Your Own Home thread;
Armchair and Real solicitor hive mind advice required.
From previous posts, you might recall I am looking to extend the lease on my flat this year. After 25th March, I am into the last full year of 80 years unexpired which is the last year before the cost of extending becomes exponentially greater.
I am not looking to buy a share of the freehold before anyone suggests that.
I was weighing up the informal approach versus the statutory approach. I have gone for the former initially, as the latter would need me to wait until August and could cost more money (additional costs).
The freeholder's solicitor has come back to say they are prepared to offer an additional 90 years, at the same terms, for £5k.
I think this is a good deal because;
My tentative budget for the statutory extension is/was £10k
The statutory extension would also be 90 years
There has been no mention (so far) of any other costs
£5k is at the lower end of any lease extension calculators I have tried
The existing terms are what were on the lease when I bought less than two years ago so my assumption is that if they were good enough for our solicitors to OK at the time of purchase, they should still be good less than 2 years on.
How naive is any of the above?