When a property’s lease term begins to shorten, it can quietly erode its value and marketability. In the current market, demand for flats is already more sensitive, and many buyers now prefer leases of 100 years or more to feel confident about long-term value. Once the remaining term dips below 85 years, the cost of extending the lease increases sharply – and the property can become harder to sell or remortgage due to lender restrictions.
What happens when your lease gets too short
A lease is essentially the time you own the right to occupy your property. As that time runs down, problems can arise both for owners and potential buyers.
Mortgage complications:
Most mortgage lenders are unwilling to finance properties with a lease of around 80–85 years or less. This means your pool of potential buyers shrinks dramatically, leaving only cash purchasers – who typically expect a significant discount.
Falling property value:
A short lease can have a measurable impact on the property’s market price. The shorter the remaining term, the faster the value drops, making it a costly issue to ignore.
Higher renewal costs:
Extending a lease becomes progressively more expensive as time passes. This is because of something called marriage value – the additional value created by extending the lease – which the leaseholder must share with the freeholder once the term falls below 80 years.
Why early action makes financial sense
Taking steps to extend a lease well before selling a property gives homeowners more control and peace of mind. It ensures that, when the time comes to sell, the property remains attractive to the widest range of buyers and commands the best possible price.
Negotiations with freeholders can sometimes take time, particularly where unrealistic valuations or delays are involved. Starting the process early avoids last-minute stress and prevents your property from being undervalued due to an expiring lease.
How a surveyor can help
Professional guidance is crucial for achieving a fair and accurate lease extension valuation. A surveyor with experience in lease renewals can:
- Provide an independent lease extension valuation to determine the correct premium to pay.
- Advise on whether to pursue a statutory or informal lease extension route.
- Handle negotiations with the freeholder on your behalf.
- Ensure all legal and procedural steps are correctly completed.
Cheke & Co’s experienced team regularly acts for leaseholders across Essex, Greater London and the surrounding areas, offering expert valuation and negotiation support throughout the process.
Protect your property’s value with a timely lease extension
If your lease has fewer than 85 years remaining, it’s worth acting now to safeguard your investment. Extending early not only protects your property’s value but also ensures a smoother, more affordable process.
The Government is currently reviewing and reforming aspects of lease extension legislation, which may affect the way future extensions are carried out. Speaking with Cheke & Co ensures you receive the most up-to-date guidance and understand how any proposed changes could impact your situation.
Cheke & Co provides free initial quotations and impartial advice for lease extensions. You don’t need to be planning to sell immediately – a healthy lease simply helps protect your long-term financial position.