Perhaps you don’t want the expense of extending your lease, especially when you’re getting a steady income from the property or are enjoying living there.
Maybe you intend to sell soon. Or maybe you intend to keep the property for the rest of your life and leave it in your will. All of these thoughts may deter you from extending the lease or make you think it’s not a problem.
Beware however a flat with a lease length of close to 80 years or under will continue to lose value as the lease term shortens, particularly in a falling market.
Once the lease of your flat falls below 80 years, even by a few days, the cost of a lease extension will considerably increase more rapidly due to a phrase known as ‘Marriage Value’. The later you leave it after the 80-year watershed, the greater the cost of a lease extension, not to mention a lease with less than 80 years will be harder to sell and mortgage lenders are reluctant to fund properties with shorter leases.
At Dutton Gregory Solicitors our Property Litigation Team specialise in lease extensions both under the 80 year watershed and over, and can assist and guide you with the process.
The Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) provides leaseholders with the right to extend their lease; subject to certain qualifying criteria being met. In brief, the Act provides the leaseholder with a right to extend the lease term by a further 90 years and extinguishes the ground rent. This is known as a statutory lease extension.