How to extend your leasehold’s length
Thursday, 7 April 2016
If you have bought a leasehold to a property, you own the right to live in that property for a specific number of years. Eventually however, your lease will run out and the ownership will return the freeholder. Additionally, if you have less than 60 years left on your lease it will be almost impossible to remortgage which will drastically reduce your ability to move home. Therefore you should avoid allowing your lease to drop below this threshold.
If you have owned your leasehold property for at least two years you are legally entitled to extend your lease. A lease is usually extended by 90 years and it is recommended that you strongly consider extending your lease once you have less than 83 years left. If you let your lease drop below 80 years you will end up paying 50% of the property’s ‘marriage value’ on top of the cost involved with a normal lease extension. The ‘marriage value’ refers to the amount of extra value the lease extension would add to your leasehold. With this in mind, if you’re currently looking to buy a leasehold do not be tempted to buy one with less than 83 years because you need to have owned the leasehold for at least 2 years before you can extend it.
In addition to the cost of the lease extension itself, there will be some other fees involved. If you instruct a legal team to process your extension you will have to cover their legal fees but you will not have to cover the freeholder’s legal fees. You can also expect to cover the surveyor’s fees who will need to visit the property in order to value the lease extension. Finally, unless the cost extension is more than £125,000 you should not have to pay any stamp duty fees.
When extending your lease it is strongly advised that you instruct a property legal team to process the legal side of the extension. An experienced team in this specialist area will be able to clearly advise you regarding your lease extension. The leasehold enfranchisement team at Rollingsons have considerable experience with leasehold extensions and can process your lease extension from start to finish. For more information or to arrange an initial consultation, please contact us on 0207 7611 4848.
Rollingsons Solicitors Ltd are a Central London law firm that focuses on building lasting relationships with clients by providing practical and effective legal solutions to problems faced by businesses, individuals and families.
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