At Cheke & Co we are experienced at advising leaseholders seeking to extend their lease.
Once the unexpired term of a lease is less than 85 years, the value and saleability of the property is likely to be affected. The cost of extending the lease will be questioned by purchasers who would prefer not to pay the costs involved. Mortgage lenders also require valuations undertaken on their behalf to reflect the lease length and costs of extending the lease.
The cost of the premium payable to the freeholder increases as the lease length reduces, so it’s prudent to consider extending your lease as soon as possible. The cost of extending before a lease is 80 years is highly recommended because no marriage value is payable. The marriage value is the difference between the value of the property before and after a lease is extended.
If you purchase a leasehold property, you cannot extend the lease within the first two years so its not uncommon for a lease to be extended while its being sold.
The lease extension process can be complicated. Often a freeholder will propose to grant a new lease of say 125 years at a suggested cost based on the remaining years of the lease. However, as a leaseholder you have the right to a statutory lease extension which involves the addition of ninety years to the existing lease. The valuation of the premium is undertaken by a Chartered Surveyor and can be used in lease extension negotiations. Our advice may differ depending on whether you are considering selling or retaining your property as an investment.
If the freeholder and leaseholder can’t agree the costs of the premium payable for the extended lease, then the matter can be referred to a tribunal for a decision.
We are highly experienced at saving homeowners’ money when extending their lease and would be delighted to assist you to maximise the value of your leasehold property and enhance its saleability. Please contact us for an initial discussion.
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