Who should extend their lease?
If one of the below is true you should consider extending your lease.
If you have a lease under 80 years:
Every day you wait it gets more expensive to extend your lease but also harder to sell and mortgage your property – definitely get on with it!
If you have a lease between 80 and 85 years:
It gets much more expensive to extend your lease once it hits 80 years. This is because you have to pay an extra fee to your landlord called ‘marriage value’, which increases as your lease shortens.
If you have a lease below 90 years and you want to move:
Mortgage lenders are increasingly unwilling to lend on short leases. As a result, buyers are wary of short-lease flats. If you lease is nearing 90 years and you want to move, it’s best to extend it before you market the flat.
If you want to reduce your ground rent:
Extending your lease removes your ground rent, so if you’re sick of making a yearly payment or it is making your flat hard to sell then extending is a good idea.
If you’ve got a lease which has more than 90 years remaining, there is less urgency.
Who Can Extend Their Lease?
Most leaseholders are eligible to extend their leases so long as the following are true:
- you’ve owned the property for 2+ years
- you don’t own the flat under a shared ownership scheme
- your freeholder isn’t ‘protected’ from lease extensions – this is quite uncommon