Extending the lease on your property can be a costly and complicated process, so seeking the appropriate legal advice from a property solicitor is important. The lease on a property can be extended providing you have owned the leasehold property for at least 2 years. In most cases, an owner does not need to start the process of extending the lease until there is less than 95 years remaining. If you are planning on selling your property, it is often advised that you extend the lease. Increasing the lease can also add value to the price of the property.
It is usually worth extending the lease if the lease length falls below 80 years, as you will need to pay marriage values. Marriage values come into force once the lease falls below 80 years. This is due to the leaseholder having to pay marriage fees. The marriage value is calculated based on the properties market value with its current lease against the market value of the property with the extended lease. The marriage fee payable is half of the difference.
It is important to be aware that if the lease length falls below 70 years, it will be a challenge for the new buyer to secure a new mortgage on the property. Properties however, can still be bought regardless of the lease length, but the majority of mortgage lenders will not give you a mortgage if the lease is lower than 60 years.
So whats the process of extending a lease?
Once you have decided to extend the lease, you should contact the freeholder to informally negotiate and offer a price for the lease. By coming to an informal agreement with the freeholder, it can save you both time and money.
The next step is to instruct a valuation surveyor and a lease extension solicitor. It is best to go with a solicitor who has experience in the lease extension process. Once this is done, a formal offer will then be made and rest will be dealt with by your chosen solicitor.
The final steps of this process will be agreeing on a final price and paying the deposit required. Please note that the lease extension process can take up to a year.
If you are looking to extend your leasehold, the LawStore can help you! The LawStore uses a panel firm of solicitors who will adopt the best course of action, tailored to suit you and ensure your lease extension process runs as quickly and efficiently as possible.
For further information or advice simply call the LawStore on 0845 603 6544 or visit us online to find out more.