I am looking at one bedroom leasehold flats and have ended up with two realistic options that are pulling me in opposite directions. One is in an area I know well and like, walking distance to work, but the lease is 79 years and the service charge has been creeping up. The other is about twenty minutes further out by bus, a slightly bigger flat with 118 years on the lease, lower service charge, but the area is nothing special and resale would probably be slower.
My spreadsheet tells me the short lease flat is the riskier buy on paper. I know lenders get twitchy below 80 years and that extending later will cost me… although the premium calculator I found online suggested roughly 12 to 15k which is not nothing but not catastrophic either. I am conscious that I am probably rationalising because I prefer the location.
For those who have bought leasehold, did you prioritise the lease terms or the area? I keep going back and forth and I think I need someone to just tell me I am overthinking it.
@claraW777, I would be very cautious about the 79 year lease. I own a leasehold flat myself and the lease length and freeholder relationship have caused me far more grief than I ever anticipated when I bought it.
At 79 years you are already in the zone where lenders start restricting products, and by the time you have been there five years you will be at 74, which is below most high street thresholds. The informal premium estimate of 12 to 15k is one thing, but the actual process of extending can drag on for months, and if your freeholder is uncooperative or uses their own surveyor to inflate the marriage value calculation, the cost can be significantly higher than the online calculators suggest.
The service charge creeping up is also a red flag. In my experience that tends to accelerate rather than level off, particularly in converted properties where the freeholder has no incentive to keep costs down. You mentioned resale on the longer lease flat would be slower, but resale on a sub-80 year lease in a few years could be genuinely difficult rather than just slow.
@Clara_Obscura, thank you for that, and I do take the point about lease length causing headaches. I have been reading up on it and the marriage value threshold at 80 years is the bit that worries me most, because by the time I might want to sell in five or six years it would be sitting at 73 or 74 years and that is firmly in the expensive zone for extensions. The thing is, the price already reflects the short lease. It is coming in about 18% below what a similar flat with 120 years would go for in the same street, and the freeholder is a named individual rather than a faceless management company, which people keep telling me makes informal extension negotiations easier… although I am not sure I believe that. I suppose what I am really trying to work out is whether the discount is genuinely big enough to offset the extension cost plus the hassle and uncertainty. Did you get any quotes when you looked into extending yours, even rough ones?
This is eerily similar to what my daughter was looking at a few months ago, except her version was a 82 year lease near the station vs a share of freehold further out in a new build estate with no character whatsoever. She went for the new build in the end, largely because the mortgage broker said it would be simpler, and I think she slightly regrets it now. She keeps mentioning how quiet the street is, which I think is code for boring.
I am no expert on lease extensions (I’m no expert on much, as this forum has probably gathered by now) but I do remember her broker saying anything under 80 years made some lenders twitchy, so even if the price discount looks attractive, you might find your pool of buyers is smaller when you come to sell. That said, five or six years is a long time and the rules might change. Worth checking what the extension would actually cost before you rule it out, I’d have thought.
I would go long lease further out every single time, and I say that as someone who has watched neighbours try to sell short lease flats around here. The theory is always “oh you just extend it” but in practice it is slow, expensive, and dependent on a freeholder who has zero incentive to make it easy for you. I know someone locally who budgeted £8k for a lease extension and ended up paying closer to £18k once the freeholder’s surveyor got involved and the whole thing dragged on for over a year.
Location is nice but you can’t mortgage a location. A lender looking at a 72 year lease in three years time when you want to move is not going to care how walkable the high street is. The further out flat with the long lease will be boring but sellable, and in my experience boring and sellable beats charming and unmortgageable every time.
PS happy Christmas to anyone reading this instead of watching the King’s Speech 
@greenwhistle_hants, I think this is one of those cases where the sensible answer and the right answer are different things. A lease extension is a known, finite cost that you can budget for and plan around, and the reforms coming through should make it cheaper and simpler anyway if they ever actually arrive. Location, on the other hand, is the one thing about a property you genuinely cannot change. I sold a flat earlier this year and the single most common bit of feedback from viewings was about the location, not the lease length, not the service charge, not the slightly tragic kitchen. People wanted to live somewhere they actually wanted to live, which seems obvious but apparently needs saying. If the short lease flat is in a spot where demand is strong and the numbers work after factoring in the extension cost, I would take that over a long lease in a place you will spend every weekend wishing you lived somewhere else. Anyway, happy Christmas, I see we are all doing the thing where we pretend to be watching telly but are actually on a property forum.