Extending my Lease
A very interesting question cropped up with one of our customers today regarding extending their lease on their flat.
As you may be aware, when a lease gets low then it has a big effect on (a) its value (b) its saleability and (c) its mortgage-ability!
We would tell you that a lease with ‘8’ at the front of it (i.e. 85 years) will get prospective buyers questioning whether it is worth buying it. When it gets less than 70 years then finding a mortgage will be a challenge. However, if you want a short mortgage term, then we can still oblige you on the mortgage-front but look at other solutions as your prized asset could fall in value fast!
If you already own the property, and have done so for 2 years or more, then you have a right to extend it by a further 90 years. For example, if you had 60 years on the lease then it could go to 150 years which is far better! Be aware that this can be a long drawn out task as you are likely to pay for a surveyor and legal costs. Have a look at the Google term ‘cost to extend my lease’ as there are some good calculators out there!
However, that said, the government are presently consulting on the Leasehold Reform Act. Their concern is that freeholders are charging an excessive amount to renew a lease. In years to come we fully expect this cost to reduce but for now, if you need to extend the lease then you will need to bite the proverbial bullet!
For more info on this subject then one of our experts will happily advise you on which mortgage lenders will lend on properties with low lease terms.