Hi. I am currently looking at an ex-council flat which suits my budget for a Buy To Let, but the lease is 99. Is there anything that i need to be aware of?
I am aware you will get less lender willing to give you a BTL mortgage when it is heading towards 80.
But how do I know if I can extend it? is it that I ask the council for it or given?
It is bit hard to find out if I am not the leaseholder, any suggestion helps!
Regards
There may be several things to be aware of. Some lenders don’t like ex-council flats, particularly in blocks. The Council being the freeholder can cause problems for leaseholders, especially if they decide to carry out large scale refurbishment of the block/estate and which will be expensive for you. The Council may also prohibit certain things that would ordinarily not be a problem.
Have a look at this: Leaseholders facing 'staggering' bills for ex-council flats | Leasehold | The Guardian
dave7 You can get a lease extended, but it my only be for 2 or 3 decades depends how long the lease was in the first place .It may have been for only125 years. Then it will cost several thousand to extend it again. I would never buy a short lease place . I have bought with an original lease of 999 years. Usually the council built stuff has much shorter leases so they make money in the future
Shop around there’s plenty of lenders who will lend on 70 year lease remaining.
When I was buying a flat whose freeholder is the local authority, I remember I called the council’s leaseholders team during the purchase process and asked questions, e.g. how much roughly would it cost to extend the lease etc. You can do the same.
Frankly to my experience councils are better freeholders than a random company, as they have certain standards for lease extension. Give the relevant team a call and hopefully they can give you an idea about approx costs for lease extension…
My advice is never, ever buy a short lease. The freeholder has you by the short and curlies. Even with a share of freehold it can be extremely long winded, trying and expensive. Just avoid and look for something else. It will either be a nightmare to extend or sell on.
Nightmare extending. It took us 3 years and they kept putting the price up as they delayed the
process.
There you go ! don t do it
I really wouldn’t… as these are essentially Leasehold, you are beholden to the Council Landlord, and will be liable to any repairs improvements. They can be incredibly costly.
Dave 7 There you have a big majority saying “don t do it”
Totally agree with David122. We have a buy-to-let which is still partly council flats and the private owners get stuck subsidising the cost of refurbishments, we pay more than our fair share. Getting the lease extended is no problem after owning for 2 years, but it’s the least of your worries.
Thanks all for your advice, although, i am still baffled why some people knowing all this but still do it? I know some people owning dozens of ex council and doing either airbnb or HMO and live happily after?
Is it location sensitive? i.e. some locations are suitable due to high rent yield etc.
Oh and also another question then, if not ex-council, then what and where shall we invest in BTL? somewhere got good yield or somewhere close to where you live?
Always near to home for obvious reasons. You will always hear different views ,its up to you !
Simple answer to a 99year lease, don’t touch it, 99 gone in a flash.
Close to where you live if you can afford it. We went 275 miles from where we live. Cheaper properties higher yields but what a nightmare being so far away. We could not find a good Agent. Became very resourceful with getting neighbours and trades people’s phone numbers but inspections had to be done and tenants took advantage of us being so far away.