Extending a Lease on a Flat
Did you know that around 30/40 years ago it was usual for landlords to grant, and for leaseholders to accept 99 year leases on flats? Unfortunately this fell out of favour as leaseholders found out when they came to sell it that leases are, by definition, wasting assets. Therefore they became less valuable as the term remaining reduced. Then once it drops below 70 years buyers found it difficult to get mortgages, making the market limited to cash buyers who would think twice before buying something that could not be mortgaged.
This does mean that there are a lot of flats out there originally on 99 year leases that require extensions. If you own a flat you should immediately check how long your lease is before considering what action to take.
Lease extensions generally cost more when the term drops below 80 years. The longer you leave it the more expensive it becomes.
There are two ways of extending your lease one of which is to negotiate terms with your landlord and the second is to exercise your statutory rights (however, you must have owned it for at least two years before you are eligible). You should be aware that the costs include a premium for the additional number of years the landlord’s surveyor and legal fees as well as your own surveyor and legal fees.
The most important thing you should take away is that the process takes time and often people underestimate this and try to extend a lease at the time of sale which makes it difficult and stressful for all concerned.
For more information or to see how we can help you, please contact our Residential Property Team on 01279 755777.