Leasehold owners of flats and maisonettes whose leasehold is due to expire within the next 60 or 70 years should apply to have it extended while property prices remain relatively low throughout the UK.
Whilst there are some exceptions as to who is entitled to a lease extension, the vast majority leasehold owners have a legal right to extend their leasehold – and should do so now rather than encounter difficulties when it comes to selling the property.
Following recent legislation, most leaseholders now have the right to extend their lease by 90 years, in addition to the unexpired term.
Under a process known as ‘enfranchisement’ the owner is obliged to pay the landlord a premium for the lease extension. If a premium can not be agreed then the price can be determined by the Leasehold Valuation Tribunal. Most lease extensions take place without ever going to Tribunal.
One of the main drivers for increased activity when it comes to lease extensions is that many of the lenders in the UK have re-set their requirements for the minimum term remaining on lease. Many banks now require a minimum 70 years remaining on the lease of a residential property.
A few years ago this minimum term was much closer to 50 years. Such a dramatic change in lending requirements has rendered many properties unmortgageable unless the lease is extended.
Be sure to use a conveyancing solicitor who specialises in lease extensions when it comes to extending you lease. This is a complex area of law which required compliance with prescribed time frames and prescribed documents.
When it comes to negotiating a lease extension, Fridaysmove can provide advice on the price we believe should be fairly paid under the 1993 Act once we have received an instruction to carry out a full leasehold valuation. Our free leasehold extension calculator services contains calculations are based on our experience of acting on behalf of leaseholders and freeholders under the 1993 Act.
Our experience in lease extensions also comes from cases that have been brought before the Leasehold Valuation Tribunal. This publicly available information can give the prices paid for lease extensions on flats of various values and lease lengths in different areas.