Dan Johnson

“I own the freehold of a terrace house on a street off Clapham High Street, which I have owned for roughly 25 years. The terrace house is divided into two flats.  

I acquired ownership of this freehold somewhat accidentally: I purchased the groundfloor flat 25 years ago which was freehold tenure. I lived in the flat for 5 years but when I came to sell it, an estate agent advised me to sell the leasehold and retain the freehold. Which is what I did. The upstairs flat's lease was already 'short' at 65 years at this stage, so the argument was that there could be some value. The leaseholder, who had held the lease from inception, sadly died a few years ago, and the lease still hadn't been extended. His heirs approached me to extend the lease at which point I requested a formal valuation from a surveyor. His valuation came back at £125k (including marriage value). 

The heirs chose instead to sell the flat at auction and a property developer bought it. We have since discussed the lease extension and I think he was very shocked at my surveyor's valuation. Anyway, by now marriage value had been abolished, leaving our basis for negotiation uncertain. He eventually asked to pause our negotiations indefinitely. Meanwhile the lease now has 48 years remaining. But I guess he hasn't much of an incentive to extend, especially while legislation is uncertain. 

Based on the calculations the surveyor helpfully spelled out in his report, I estimate the premium has reduced to £60k to £70k. Perhaps half of what it would have been had marriage value not been abolished. 

I am not a property developer or property investor. I have only one freehold. I have only one other property which is the flat I currently live in. The premium for the lease extension was factored into my retirement plans, but now it seems half of this will be transferred to the bottom line of a wealthy property investor. Makes me sick to my stomach.”