In this blog we aim to give you a quick overview of the process of extending your lease and why, ultimately, we think it’s a better idea to extend your lease earlier. When it comes to remortgaging or selling your property, the amount of time left on your lease is very important. Any potential buyer will struggle to be accepted for a mortgage once the unexpired lease term falls below 80 years.
Who can extend?
The 1993 Leasehold Reform Act gives flat owners who have owned their 1 property for at least two years the right to extend their lease by 90 years and have the ground rent reduced to zero. Flat dwellers may also have the option to buy the freehold with the other flat owners in their block. This is always an option worth exploring with your solicitor.
Costs involved
The process of extending a lease can be long and tortuous, it can also be expensive. There are premiums to be paid which are a matter of negotiation between the leaseholder and freeholder’s surveyors. This is calculated according to the current length of the lease, the location, the ground rent, the value of the flat/ house with the lease as it is, and the value when it is extended.
Why extending earlier is a good idea
If you choose to voluntarily extend your lease before the remaining term drops below 80 years there will be no marriage value payable to your freeholder. As such it will be cheaper
to extend your lease. At Hanne & Co we advise you to extend your lease sooner rather than later as failure to do so may result in significant financial consequences.
Call and speak to one of our Property Team today if you’d like to discuss the details of extending your lease.
Tel: 0207228 0017
