Over the years I have saved my clients an average of around 25 per cent on their landlords’ starting offers for lease extensions and freehold acquisitions. However, because so many factors may or may not affect a particular case, the savings achieved can vary widely. This is illustrated by a recent success for a client extending leases on two flats in adjacent buildings on the Crown Estate (in a prime location even in Knightsbridge terms!)
The smaller flat originally had one bedroom, and was valued as such, although recently converted to a two-bed. We settled at a premium below my own initial best-case target (as I will always try to achieve), a saving for the leaseholder of just under 11 per cent on the landlord’s starting offer.
However, on the larger flat, with three bedrooms and two reception rooms, we saved a massive 41 per cent (again, better than my initial forecast).
The existing leases were the same length, so this was not a factor in the different results. To a large extent, the difference was because the landlord, agreeing from the start that it should be valued as having just one bedroom, happened to start at a much fairer price on the smaller flat!
Another factor was that both properties had been improved to the same standard, but obviously, to do this had required a considerably larger investment in the bigger flat. Basing the valuations on the pre-improved state, as bought by the leaseholder, therefore had a substantially greater impact on the premium for the three-bed flat.