If you have owned your property for at least 2 years and your lease was originally granted for 21 years or more, you will have the right to buy an extension of your lease. Typically leases tend to be for 99 years or 125. However this will vary depending upon the type of property as some lease hold properties are on a 999 year lease.
If you are thinking of selling your leasehold property which has a relatively short lease which will make a difference to the sale value then ideally you may wish to consider extending the lease sooner rather than later.
Any purchaser buying a leasehold property should look carefully verify the length of the remaining term of the lease as all mortgage lenders will require that the remaining lease term is of a required minimum length (usually 70 years) before they will lend money on a property.
The premium that you will have to pay to extend the lease depends on a number of factors, mainly, the current term the lease, the ground rent payable (and whether the ground rent is subject to any review) and the current value of the property.
The calculations must be carried out by a specialist valuer/surveyor experienced in this kind of work. The surveyor will also be able to negotiate the premium that is paid with the representative of the landlord once the formal lease extension process has been initiated.
For example, if your lease currently has 68 years left to run and after extending under the 1993 Act it will have 158 years. The existing ground rent under the lease will be cancelled out and there will be no ground rent to be paid under the new lease. This is sometimes called a ‘peppercorn’ ground rent, legally speaking this represents the fictional payment of a small item of value, (the peppercorn), although in reality no payment can or will be demanded.
Our Residential Conveyancing solicitors have been carrying out lease extensions for a number of years and we can ensure that this process goes smoothly and efficiently for you. Our lease extension experts are able to offer this service;
Give us a call if you want to get a professional and friendly service;
For a free, no obligation conveyancing quote and general help and advice with your house sale or purchase, please ring us today on 0208 574 0666.