Many homeowners regard lease extension [ if they are even aware of it] as a complicated and expensive procedure. Coupled with the apparently lengthy terms of most standard leases, it’s no wonder that leaseholders might be tempted to put off making a decision until “another day”. Sadly, procrastination in this case can have unpleasant consequences. Putting off a decision to extend a lease today can lead to reduced financial security and peace of mind tomorrow.
The main threat comes from the adverse effects of a short lease on the value of your property. If you allow your lease term to dwindle, you may be unpleasantly surprised at just how difficult it is to sell your property. Unless you’re fortunate enough to live in the tiny minority of desirable areas where people will always buy, a short lease property will prove very unpopular with buyers and lenders alike. A property that is difficult to sell is, of course, worth much less on the open market – and if you can’t sell it at all, it’s effectively worth nothing. Even if you don’t intend to sell, a great deal of your financial wellbeing is tied up with the value of your home. At the very least, you will jeopardise your own stake in the property, so there are compelling financial reasons to turn your attention to lease extension as soon as you possibly can.
Residential leasehold law also contains a hidden deadline that can leave you out of pocket unless you move quickly. This is the “marriage value”, a lump sum premium that you have to pay to the landlord if you extend a lease when there are less than 80 years to go on the original lease term. This sum is based on a projected increase in the value of the property, i.e., you have to pay part of the proceeds of a sale that hasn’t actually happened. If nothing else, avoiding the marriage value payment is a very good reason to move quickly and extend your lease now.
The good news is that a UK leasehold extension is a straightforward way to safeguard the value of your property and give you security and peace of mind in the future -provided you have the proper specialist professional advice and assistance. Most leaseholders are entitled to extend a lease by a further 90 years, in addition to the remaining term, by serving notice on the landlord. The new lease is then granted at a notional, peppercorn rent. Once you’ve made a decision to extend your lease, this part of the process can be safely left to the professionals. A valuer or surveyor will calculate the exact costs, based on local property prices and compensation to the landlord, and a solicitor specializing in lease extension work will take care of the paperwork for you.
Of course, all of this will involve some outlay on your part. However, your decision to extend a lease is a cost-effective way to invest in your own peace of mind and future financial security.
Considering Extending a UK Lease? Contact our experts now
Whether you want to know more about how to extend a lease or about how a freehold purchase could help you, for specialist FREE initial telephone Lease Extension Advice – contact our specialist leasehold enfranchisement and lease extension solicitors
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