Six Great Reasons To Extend Your Lease Now
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There are approximately 1.5 million leasehold properties in England and Wales – that’s a lot of leases and, of course, each of them is going to run out one day. If you own a long leasehold residential flat, (which refers to any lease, which was originally granted for 21 years – as distinct from, say, renting a flat under a monthly tenancy) then, at some stage, you (or whoever owns the flat in future) is going to have to make a decision on whether to extend your lease – because if you don’t, then eventually, that lease will simply expire and you will own absolutely nothing.

What’s remarkable is how few leaseholders realise that they have the legal right to extend their lease – that’s right, they can force their landlord to add an extra 90 years on to the existing lease term. So, say you have got 75 years left on your lease – by paying a premium to your freeholder, you can get that term increased up to 165 years.

But extending a lease is obviously going to cost you. Your freeholder cannot be expected to grant you another 90 years on your lease without being compensated for the reduction in the value of the freehold. Not only will you have to pay a premium to your landlord for the privilege of a lease extension, you’re also going to have to pay the legal costs of your own solicitor and a surveyor to assess the value of the lease extension – and you have to pay your freeholder’s legal costs. Is it really worthwhile therefore? Here are five great reasons which say yes.

1. If you do nothing, your lease will simply expire and you will own nothing

2. The government designed the whole lease extension system to make it attractive for home ownership – therefore, despite the cost you have to pay, it’s almost inevitable that the increase in value of your flat will easily exceed the cost

3. Every day that passes means your lease is getting shorter – and the shorter the remaining term, the more you’re going to have to pay to your landlord.

4. Many people welcome the current rise in property prices throughout England and Wales. However, for owners of leasehold flats, there is a potential downside – as the price of your flat increases, so does the cost of lease extension. Therefore, in a rising market, it’s absolutely essential that you get your application for lease extension in as soon as

5. Lease extension makes it much easier to sell your flat, because many purchasers are put off by flats with short leases

6. Getting a mortgage on a flat with a short lease is becoming increasingly difficult. Lenders are increasingly reluctant to lend on short leases. Whereas 10 years ago, you could easily get a mortgage on a flat with say 50 years remaining, now many lenders simply refuse to lend on any lease term less than say 70, or even 80 years.

There you have it – six great reasons to extend your lease.

Don’t delay – get in touch with a solicitor such as Bonallack and Bishop who specialises in leasehold extension work today.


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