Dear forum
I am the freeholder of two London maisonettes (one up one down). The leaseholder of one of them wants to increase their lease from 85 years to something over 99 years to make it more attractive to buyers, as they are selling up.
I have insisted on a valuation from an ALEP surveyor, which they have obtained, however it is a “desktop” valuation and has come in around the £9K mark. This roughly tallies with online calculators which put it between £8-11K.
However I’m wondering whether an in-person valuation is necessary, the current leaseholder is (unsurprisingly) reluctant to pay for this as its cost is close to £1K.
So my question is, is it necessary to get an in-person valuation or can the desktop equivalent be relied upon?
Thanks for any help.
@Jeremy2
How much effort you and leaseholder take to agree a value is entirely up to you they have to pay your fees (but can challenge at tribunal). ie You can get your own valuation which they pay for. What is ‘necessary’ is entirely up to you. You could pluck a figure from thin air, use an online calculator or whatever
Hoa have a good page on this Google
“lease extension valuation homeowners alliance”
which suggests that in person inspections are for unusual properties - so there won’t be many similar to compare against and get a value using desktop methods.
It is they who want the lease extension. You don’t have to agree. For them to force it through the tribunal is expensive and would delay their sale efforts. You might also reasonably say that you don’t want to have the hassle and expense every 10 years so offer an extension of say 25y (or 90y which is what they get if they go the statutory route). At same time they are still your leaseholders you /they have to get on (with them paying GR and SC and you having responsibility for eg external maintenance)
It’s like house sales - online or reality valuation gives a guide but the final price agreed depends what a seller is willing to sell for and what a buyer is willing to pay. Only difference is it can be challenged at tribunal if freeholder/seller asks too much. If you ask at top end of range given by a valuation hard for them to say that’s an unreasonable amount I’d have thought.
You could also get separate input from local estate agents on value of the property and how much extra the premium is for having a long lease. It’s not just the value of the lease extn but also can be harder to get a mortgage and risk of difficulty remortgaging in future and simply the hassle and uncertainty of having to get a lease extension in future will put people off. People buying a place don’t want the possibility of 11k spend needed in future they want to get a mortgage now that covers everything- places with a good roof are much easier to sell than ones that will need a new roof in next 5y. I expect value of property with long lease will be increased by more than 11k.
Good luck
Thanks @David240 that’s helpful info. My feeling is probably to offer near the top of the online calculators for an additional 90 years, in view of the changes possibly coming in it may not be of benefit to accept less for shorter, possibly. 