legal right to extend

Six Factors That Will

Motivate You To Extend

Your Lease Without Delay

In England and Wales, there are roughly 1.5 million leasehold homes, which is a considerable number of leases and, needless to say, each and every one of them will run out someday. Ultimately, if you own a long leasehold residential flat [ ie any flat with a lease which was initially granted for a term of at least 21 years], you have to determine whether not to extend your lease. Owning this type of long leasehold flat is completely different from simply renting a flat or apartment under a monthly tenancy. If you own a long leasehold flat and then choose not to extend your lease, essentially it will someday expire and you will possess nothing of your property.

 

You would probably be surprised how very few leaseholders are aware of their legal right to extend their lease. Say you have 75 years remaining on your lease - you can compel your landlord to add on an additional 90 years on to your current lease term, so you can get that term extended by up to 165 years, by simply paying a premium to your freeholder.

 

However, nothing comes. Three in this life. You probably won’t, therefore be surprised to hear that there is a cost to extend your lease. Your freeholder cannot be expected to simply give you an additional 90 years without receiving some sort of compensation as the freehold will see it's value decrease when the term of your flat is increased. Not only will you have to spend money on paying a premium to your landlord for the lease extension, there are also legal costs that need paying for; your own solicitor as well as your landlord's legal costs, which must be reasonable. In addition, surveyor will also need to be paid to value the right price, you will need to pay for your lease extension. So when you add up all these costs, is extending your lease advisable?

 

Here are six great reasons which will motivate you how to extend a lease.

 

1. Do nothing and your lease will simply run out. After this, you won't own anything.
2. Every single day that goes by means that the term remaining on the lease is steadily being reduced - and the shorter your lease term is, the more you have to pay to your landlord to extend the lease.
3. Extending your lease makes it much simpler if you are wishing to sell your flat. Flats with short leases are not desirable to buyers.
4. The average homeowner in the UK has welcomed the present increase in property prices throughout England and Wales. Nevertheless, for owners of leasehold flats, there is a possible disadvantage to the increased prices. As the price of your flat rises, so does the premium you are going to need to pay for your lease extension. In a housing market where prices are increasing steadily, it's imperative that you get your application in for your lease extension ASAP. In fact, it’s recently been estimated by a leading industry organisation, that the cost of lease extension in London is currently going up every year by around 12%. That means, at those current rates, in under seven years, the price you’re going to need to pay to extend your lease will double.
5. The government developed the entire lease extension system to tempt the public into home ownership. Although there are no guarantees, generally you can expect the rising value of your flat to seed, often significantly, the various costs you will need to pay to extend your lease.
6. Most mortgage lenders today reject applications for lending on any lease period under 70 years, or even 80 years. 10 years ago, you could usually arrange a mortgage on a flat with a lease of say 50 years remaining. Nowadays, lenders are more resistant to lending when it comes to short leases. Extending your lease means that securing a mortgage should be easier - which in turn means that your flat is going to be much easier to sell

 

So there you have it, six really good reasons that should encourage you to extend your lease - and to do so now.

 

Don't hesitate - get in contact immediately with a solicitor who specialises in leasehold extension work.