If you are a Leaseholder you must remember that those leases below 80 years can affect the value of the property as well as a potential buyer’s ability to secure a mortgage.
Most Lenders will not consider a property as a suitable security for mortgage purposes if the lease remaining is less than 80 years.
The cost of extending the lease can substantially increase once the remaining term is less than 80 years. The process of extending the lease should begin when the lease still has 82 years to run so that all matters can be concluded well before the 80 year cut off point.
The 1993 Leasehold Reform, Housing and Urban Development Act, amended by the Commonhold and Leasehold Reform Act 2002 allows most leaseholders to extend their leases by up to 90 years, to potentially improve the value of the property. The conditions being:
- You must have owned the property for at least two years
- There must have been at least 21 years on the original lease
- The Leaseholder does not need to be in resident in the property.
It is often possible to achieve negotiated agreements without resorting to the prescribed notice process, as this can be expensive. In the event that the terms fail to be agreed the legal notice process is still available.
A lease can be extended at any time, whether or not the property is being sold. If you’re a home owner and want to extend the lease but still live in the property, the process is straightforward. You will need to instruct a surveyor to carry out a leasehold valuation. A surveyor will establish the likely cost of extending the lease and then a solicitor needs to serve the appropriate notice on the freeholder.
How we can help?
Lease Extension is a specialist subject and Valuations should only be undertaken by Surveyors with relevant expertise.
Nationwide surveyors have many years of experience of undertaking such valuations and Negotiations. Wecan assist with:
- Calculate the premium required to extend the term of the lease of a property by an addition 90 years. (Lease Extension)
- Negotiating with the Freeholder or Leaseholderto extend the lease.
- Present the case at the First-Tier Tribunal if required.
What does it the cost?
- The value of the ground rent
- The value of the Freeholders interest.
- A compensation or a premium is paid to the landlord, to compensate for what they have lost by granting extra terms plus 50% of the marriage value. Marriage value is not payable if the existing lease has more than 80 years unexpired.
- The leaaseholder would usually cover the landlords reasonable legal and Surveyors costs.
We will provide guidance on how best to proceed with the options available and advise you through the complex process of the lease extension.
Our services are tailored for each and every individual circumstance.
We can act on your behalf weather you are a Leaseholder or Freeholder.
Give us a call for a free consultation and Estimate.
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