To extend lease or not to extend

[rexfontaine]

Our flat (in Hackney, east London, above a commercial property) has around 72 years left on the lease. It is a decent first-time-buyers property (one bed with one small bedroom) priced around the £170k-£180k mark.

We're looking to move next year into a small house, so will sell up.

We have been quoted £8k to extend the lease to 125 years, which will invariably make the property more attractive to prospective buyers. But I doubt it will make it £8k more attractive.

However, we do want to move. Will the lease extension really make the difference? Do buyers, and more importantly lender, need to see that 80 years+ before committing?

[JustinN]

The main lenders are now insisting on at least 70 years unexpired, so I think you should extend

The sooner you do so, the less expensive it will be

[Richard Webster]

I agree with Justin N.

What may happen in practice if you don't get an extension and still try to sell, which is very frustrating, is that buyer innocently offers and you think "Oh Good, we've got a buyer..." Then either his mortgage lender is not happy, or more likely a few weeks later when his solicitor has had a look at the lease and tells him it needs to be extended otherwise the landlord will want several thousand to extend when he sells.

Having wasted weeks on that you then either reduce price or go and get a lease extension. Even if you reduce price you may still get the same problem if you get a buyer, because the buyer may not realise he will have to pay for the lease tension, and he hasn't got the money to do that.