A short term lease can have a considerable effect on a flat’s value. Wherever possible, you should get a lease extension when the lease is anything lower than 85 years unexpired, and you should not let it drop below 80 years.
Marriage value – act before the lease on your flat drops below 80 years
The bad news is, if you have bought a flat with a short lease, or the lease is still relatively long but has just dipped below 80 years, you’re going to have to pay the freeholder more to extend it. Why? That’s very simple. As soon as any lease dips below 80 years – even by just one day, the landlord is entitled to charge you an additional premium for extending your lease – and this premium is known as the “marriage value”. So if your lease has just over 80 years to run, don’t mess around – get your lease extension as soon as possible. Even if you can’t afford a full 90 year extension, it’s very worth getting a short extension – to keep your options open, and to keep your lease above the magic 80 year figure.
Lease extension needs two years ownership?
You have to have owned the flat for a minimum of two years before you get a legal right to obtain a leasehold extension. However there is a way of getting round this [under the 1993 Leasehold Reform, Housing and Urban Development Act] – if the person selling their flat to you cooperates. Before actually selling the flat, the vendor is able to serve a formal Notice of Claim – provided they have owned the property themselves for at least two years. As a result you will not have to wait two years before being able to to extend the lease, as long as this notice is served before the sales process has been legally completed and the Notice of Claim is accurately allocated under the terms set out in the purchase contract. Extending your leasehold in this way is a highly effective and low cost way to increase the value of your newly acquired flat.
Remember – however many years your lease has to run, extending the term of that lease is going to cost you more, the longer you leave it. So our team’s strong advice is to get your lease extended as soon as possible – before the costs of doing so increase. In addition, with the housing market still relatively subdued, now is a good time to extend your lease – why? That’s simple – the cost of your lease extension is significantly dependent on the market value of your flat – and so if your flat’s value is depressed, it’s going to be cheaper to extend your lease.
In need of specialist Lease Extension Advice?
If you want help with extending your lease, our team specialises nothing but lease extension and freehold enfranchisement work for clients nationwide. So, don’t delay – contact our specialists for FREE initial phone advice on your Lease Extension, either ;
- Call our Solicitors on 0800 1404544 0800 1404544
- Or email us using the contact form below
Comments or questions are welcome.