Many people do not realise how huge the lease extension market is but recent figures from the Office of National Statistics should help to make it clear. There are 22.5 million homes in England and Wales of which a fifth are flats. Of these flats, 1.5 million are long leaseholds which are going to require a lease extension at some stage.
Lease extension – beware the marriage value
It may be the case that a lease is extended more than once and this can happen for various reasons. One may wonder why a leaseholder wouldn’t simply seek to extend their lease to 90 years in one hit. However, in tough economic times when many are short of funds, it is often easier to do a short extension in order to secure a mortgage and make the property more attractive to potential buyers. A short extension may also be preferred if the lease is running down towards 80 years. The 80 year point is crucial because the cost of lease extension suddenly rises dramatically [On the basis that as soon as the lease drops below 80 years, the freeholder is allowed to charge an additional sum for any lease extension, which is called “the marriage value”]. Leaseholders may therefore opt for a short lease extension rather than let their lease run down any further because it prevents the marriage value from kicking in.
With the leasehold extension market growing there has also been a big increase in the number of disputes between freeholders and leaseholders. Figures from the Leasehold Advisory Service support this, showing that the number of people visiting the website went up by 70,000 in 2011-12 to 400,000. Moreover, the number of enquiries received increased by 13%.
With more and more leasehold flats and the number of freeholder-leaseholder disputes going to the Leasehold Valuation Tribunal on the up, it is unsurprising that the lease extension market is growing.
Our enfranchisement solicitors are lease extension experts – call today
It is crucial that the solicitor you instruct to help you with your lease extension is a specialist because of the serious financial implications involved. Such specialists can be hard to come by but our enfranchisement solicitors have all the skills and expertise required.
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