Singing Pig

I was wondering if this kind of cover is readily available and the kind of rates it was at.

I have been offered a flat with 13 years remaining for £50k. Needless to say, it is a risk that the freeholder will not renew the lease as the current owner has not had any talks with her freeholder. The vendor needs a quick sale.

The flat is one of two in an edwardian converted house.

What is the best way to approach this? 

AFAIK the freeholder cannot refuse to renew the lease without paying compensation. 

Whether this is a good deal depends on the open market price of a similar flat - but with a longer lease (over 70 years) and the £50K you have been offered. It needs to be greater than the Marriage Value.

The marriage value is the increase in value, split between the landlord and tenant, using a complicated laid out formula that a flat with, say, a 99 year lease would bring.

You can get an idea of how a marriage value is calculated from http://www.lease-advice.org

In simplistic terms (just for example - the actual calculations are much more complicated), if a property with a 99 year lease is valued at £99K and worth nothing if no years remain, then using straight line devaluation at 13 years remaining it's worth £13K. Take the current value (£13K) from market value (£99K) leaves £86K. The tenant would thus have to pay the landlord half this as the "marriage value" which is £43K.

Dont know about teh insurance side but your downside is that you need to be able to rent out the flat for more than £320 per month to make any money on the deal. What about trying to buy the flat upstairs as well - if you have 100% of teh leasehold does that give you any better chance.

Suggest its worth spending £150 to spend an hour with a short leasehold solicitor - good luck

thanks chaps. weekly rent about £250 

cant make out if vendor is generally unfamiliar with all this or being uber canny.

do mortgages readily exist for such short leases at £50k? I heard cobalt would look at central london ones.