Have you thought about extending your lease?
Probably not. Most leaseholders don’t know how long they have left or are not interested, which means the first time you realise there is a problem is when you come to sell your flat/leasehold property.
Did you know that when a lease has less than 80 years left, it can mean that mortgage providers may not lend to purchasers, which does impact on the number of potential purchasers that might be interested. In some cases sellers have had to knock the value of their property down in order to sell, assuming the buyers will need to extend the lease at some stage at a much higher cost than had they done it before it fell below 80 years.
How do I extend my lease?
You have a number of ways, firstly it is important to ascertain whether you also own a share in the company that owns your freehold interest in your estate. If you do, then it is quite straight forward and requires applying to the freehold company solicitor to extend and you would only pay the legal costs, no large premium is due. If you do not own a share then you can do a few things:
Once you have owned your lease for 2 years and are a qualified leaseholder under the Leasehold Reform, Housing and Urban Development Act 1993, you can formally request an extension of a further 90 years which will be added to the existing term left, i.e. 70 years left will provide for a total of 160 year lease. This is a formal procedure which requires service of prescribed forms and is best left to solicitors to deal with and also requires negotiation on the amount of the premium extension to pay, with leaseholders being able to appeal to the First Tier Tribunal if they feel the need to. Any ground rent payable will also be removed with this method.
You can of course approach the leaseholder informally and discuss a lease extension and agree any terms and premium due. This is normally advised as you can often obtain a longer term but be aware that ground rents are not automatically removed via this method and you will need to ensure you are fully aware of any new terms.
If you are one of our leaseholders and you are contemplating extending your lease or you want some advice, please Contact Us and we’ll be happy to help!