If you are a leaseholder on a flat in the UK, you could be eligible to extend your lease (usually, you must have owned the flat for a minimum of two years), but there are many different things to consider when asking for a lease extension, and they all depend on the value of your flat, how long you have owned it, and how many years you have left on your current lease. It can all get a little confusing, so let’s look at it more in-depth.
What Is Leasehold?
Basically, leasehold is when you effectively own your property (such as a flat) for a certain period of time – however long your lease is for. You can apply to extend your lease if you wish to continue living there for longer or if you plan on selling your flat and wish to attract potential buyers with the promise of a long lease. However, there is a lot of information you need to be aware of before considering extending your lease.
Extending The Lease On My Flat – When Is The Right Time?
The quick answer to this is as soon as possible. It can take time (months and months) to complete the whole process, so it is especially important to get it going as quickly as possible if you’re planning on selling your flat. The cost of extending your lease will very heavily depend on how many years you currently have left on it. Generally, once the term drops below 80 years, it will be much more expensive to extend, and if you have only ever had a short lease, it can get far pricier than you could ever imagine. What’s more, after years of recession, it appears that house prices are beginning to rise. That’s another good reason why you should get on to lease extension as soon as possible – the more a flat, like yours is worth, the more it will cost to extend the lease.
Extending My Lease – The Milestones
So what are the general ‘milestones’ you should be aware of when it comes to lease extension? While these won’t be one hundred percent accurate for every leaseholder (it depends on other circumstances as well – such as the value of your flat), they’re a good guide to get you thinking about your own lease.
• 100 years or over left: you probably don’t need to worry about extending your lease at this point.
• Around 90 years left: you only really need to worry about extending your lease at this point if you are planning on selling your property in the near future. Potential buyers are more likely to go for a flat that has a long lease which they won’t have to worry about immediately after they’ve bought the place.
• Around 85 years left: you should seriously consider extending your lease at this point. Once the term drops below 80, it gets much more expensive to extend, as you will be paying for the marriage value of the flat on top of everything else.
• 60 – 70 years left: you should definitely extend at this point, especially if you plan on selling the property. Once you get down to this number of years left on your lease, it gets extremely expensive to extend, as new buyers will find it very hard to get a mortgage on a property with such a short lease.
Finally, lease extension is a complex business – very few property solicitors come across it more than once a blue moon – so it’s really important that when you appoint both a solicitor and a valuer, you make sure they are leasehold extension specialists.
Tim Bishop senior partner of Bonallack and Bishop – UK solicitors with a team of lease extension experts. To find out more extending the lease on your flat, visit their specialist website at https://ww2.extendingalease.co.uk or call them directly on [01722] 422300.
