If you are the owner of a leasehold property, it is important to consider the number of years remaining on the lease as this can dramatically affect the value of your property when selling it and whether you would be able to sell it all.
There is a general rule among lenders that they will not provide a mortgage for a leasehold property where there are 80 years or less left on the lease. In addition, the value of your property may decrease substantially as the number of years left on the lease approaches the 80-year mark and the cost of the premium of extending the leasehold will often be deducted from the purchase price.
If you are thinking of selling your leasehold property or re-mortgaging it, it is important that you read your lease and check how many years remain on the lease and whether or not you should be extending the leasehold. Prior to starting the process of extending your lease, there are a few things that you will need to get into place:
- Check whether you are actually eligible to extend the leasehold;
- Obtain a valuation of the property to ascertain a premium payable to extend the leasehold; and
- Ensure that you have sufficient finance in place to pay for the premium, your legal and surveyors’ costs as well as the reasonable costs of the Freeholder as set out in the Leasehold Reform Housing and Urban Development Act 1993
The above list is not exhaustive and there may be other factors to take into consideration.
If you are thinking of extending your leasehold or have any questions, get in touch with Richard Lyne on 0208 549 5186 and he will set you on the right legal path.