Do you own a leasehold property? How many years are left on your lease? Do you need to extend your lease?
A long lease reduces in value over time. Therefore, the shorter the lease, the less valuable your property is.
All leasehold owners should be aware of a lease that is less than 80 years. If a lease falls below 80 years, an owner would pay 50% of the property’s “marriage value” on top of the usual lease extension price. “Marriage value” is the amount of additional value an extension to the lease would add to your property. If a lease falls below 70 years, it is likely that mortgage rates will increase. If a lease falls below 60 years, it is highly unlikely a mortgage would be offered. This can make it incredibly difficult should you wish to sell your leasehold property.
Under the Leasehold Reform Housing and Urban Development Act 1993 owners have the right to extend their lease by 90 years at a fair market price. The price to extend the lease is based on a formula set out by statute.
There are two ways in which a lease may be extended:-
- By way of negotiations with the landlord;
- By way of serving a notice on the landlord. This is a formal route and proceedings are likely to be commenced.
The landlord is entitled to his costs of the lease extension so this should be borne in mind when considering the financial implications of extending your lease.
A lease can only be extended if the original lease was made for a period of time in excess of 21 years.
It is possible to extend short leases (below 60 years) however, this is likely to be very expensive. Careful consideration is needed to weigh the costs of extending against the increase in property value.
We are experts in lease extensions and can provide you with advice and information should you require a lease extension. We can also deal with serving the necessary notices on the landlord and deal with any Court proceedings and negotiations should this become necessary.
If you believe you require a lease extension, please do not hesitate to contact us at firstname.lastname@example.org