Do you own a flat? If so it will almost certainly have a leasehold title. Leases are granted for a fixed period of time, often just 99 years. This is known as the term of the lease. When the term expires, the property goes back to the landlord.
The law now gives leaseholders the right to require their landlord to grant them an extension for an additional 90 years. But many people think that if their lease has got 50 or 60 years still to run, that should be plenty of time.
However the majority of mortgage lenders will not now lend on leasehold property when the lease has less than 70 years to run. This makes it difficult to sell a property in such circumstances.
Even if your lease still has more than 70 years unexpired, it may still be worth thinking about applying for a lease extension. Here are our recommendations:
|Over 100 years||You don’t need to get a lease extension yet, but it may still be worth investigating.|
|Between 100 and 80 years||It is not essential to get an extension, but it is highly recommended as once the term drops below 80 years the amount payable for an extension is increased by a figure known as ‘marriage value’|
|Between 80 and 70 years||You should apply for a lease extension, especially if you are considering selling the flat.|
|Below 70 years||Apply straight away – the longer you leave it the more the value of your home will drop, and you would find it very difficult to sell.|
How do you know how long your lease has got to run?
- ask the Conveyancing Solicitor who acted for you when you bought the property, or
- check with the land registry. http://www.landregistry.gov.uk/public For a small fee they will provide you with details of the registered title of your property, including information about the lease term.