Why should I extend my lease?
A longer lease will maintain or enhance your property’s value and make it easier to sell or remortgage. Mortgage lenders are reluctant to lend if there are less than 70 years left on your lease. If you are thinking about selling your property, some purchasers will be put off by a shorter lease.
The two main factors determining the cost of a lease extension are the value of the property and the length of the current lease. Once the lease drops below 80 years the cost of extending it increases rapidly as the Tenant must pay the Landlord half of the increase in the lease’s value that results from the lease extension. This uplift is called the “marriage value”.
Do I qualify for a lease extension?
You must have owned your property for at least 2 years. If you own a shared ownership property, then the statutory time does not start until you staircase to 100%.
How long can I extend my lease by?
A 90 year extension to the remaining term of the existing lease.
How much does it cost to extend my lease?
The premium payable by the Tenant in respect of the grant of a new Lease is the aggregate of:
(a) The reduction in value of the Landlord’s interest in the Tenant’s flat
(b) The Landlord’s share of the marriage value if your Lease has a remaining term of under 80 years
(c) Any amount of compensation payable to the Landlord
(d) You will also be responsible to pay for your Landlord’s reasonable legal and surveyor’s costs.
Do I need to live in my flat to be able to extend my lease?
Residence is not necessary but you have owned the property for at least 2 years.
How long will my lease extension take?
The Lease Extension will usually take between 6 – 12 months depending on how efficient and reasonable
your Landlord is.
Can I assign a lease extension to a buyer?
An existing statuary claim may be assigned to the buyer upon completion of the sale, so the buyer may finalise the lease extension without having to wait two years to serve a claim.
What is marriage value?
When a lease drops below 80 years, the cost of extending the lease rises significantly because of the addition of ‘50% marriage value’, which only applies to leases with less than 80 years. In addition to the increase in the lease extension cost, the value of your property begins to decrease with each passing year, making it more challenging to sell your property at its full market value.
