Why you might want to extend your lease
Leasehold properties are defined by ownership for a set HYPERLINK “https://www.lease-advice.org/advice-guide/lease-extension-getting-started/”period of time, whereas freehold is indefinite. As time goes by, the value of the leasehold property drops as does the time left on the lease. As the number of years left gets lower, the premium to extend the lease increases. Therefore, it is important to follow some tips when it comes to extending your lease:
- Check how long is left
Don’t forget about your lease. You should seek advice on extending your lease to judge whether it is worth the expense. Properties that have shorter leases are tougher to sell and more difficult to get a mortgage on. For more information on Lease Extension, visit https://www.samconveyancing.co.uk/news/conveyancing/lease-extension-process-3772
If you do decide to extend your lease, do it as soon as possible. The shorter the lease gets, the more expensive the cost rises at an exponential rate. When the lease gets to less than 80 years, you must ask fast.
- Can I get an extension?
If you have owned your property for 2 years or more, an extension of 90 years is allowed from the freeholder. For those who have owned a property less than 2 years, it is possible to try a non-statutory agreement which is informal, but this does come with some risks.
- When might I not want to extend?
If you already have a lease over 90 years, there might not be enough benefit to extending unless you want to cancel the ground rent. You are thinking about leaving the property in the next few years. You intend to buy the freehold or you don’t think you will longer than the lease.