If you own a leasehold flat, you own the right to live there – but only until your lease expires. So how long is your leasehold? If it’s a relatively short lease or if you want to attract future buyers, you can extend your lease. But how do you know if you’re even eligible? How much money is it likely to cost? And just where do you start? Here’s a brief guide to how to extend a lease – please note that laws in Scotland and Northern Ireland may be different. This guide refers to leasehold flats in England and Wales.
Are You Eligible To Extend Your Lease?
Of course, the first thing you need to do is find out if you’re actually eligible for lease extension. To do this, approach the freeholder – you should be eligible to extend if you have owned the flat for at least two years (this falls under the 1993 Leasehold Reform Act). You should be entitled to receive an extra 90 years on your lease, even if you haven’t lived in the flat, just owned it for just 24 months. However, do beware – the law surrounding lease extension is complex, and in particular, there are any traps for the unwary – so make sure you get in touch with a solicitor who specialises in leasehold extension work, who will be able to talk you through the process and your options.
Why Should You Extend Your Lease?
There are many reasons why you might want to extend your lease, but the most obvious is that of value. When you come to sell your flat, you will be more likely to get your desired asking price if you have a long lease instead of a short one. In fact, extending your lease is likely to add thousands of pounds to the market value of your flat – it just depends on how many years you have remaining on your lease in the first place. If you have more than 90 years left on your lease and have no immediate plans to sell, then you shouldn’t be worrying about lease extension at this time. But once your lease starts to drop much below 90 years, you really do need to start considering your options.
How Much Will My Leasehold Extension Cost?
The cost of extending your lease very much depends on your flat, your situation and on how many years your lease has left. Generally, the rule is: if you have 80 or less years left on your lease, it will be much more expensive to extend. Once you get below 80 years, you’ll be paying half of the ‘marriage value’ of the flat as well as the usual price to extend your lease. If you have a very short lease, the cost of extending it could run into the tens of thousands. If you’re serious about extending your lease – then you’re going to need to instruct a surveyor who specialises in leasehold extension valuations.
What To Do Next
Whether you’ve already decided to extend your lease or you’re not sure if you’re even eligible, the next step is to seek professional advice from a solicitor who really specialises in this niche area of law. They will be able to tell you exactly what your rights are, help you source the right valuation for your lease extension, and guide you through the whole tricky process.
Tim Bishop is senior partner of law firm Bonallack and Bishop – specialist UK lease extension and lease enfranchisement solicitors. For more information call them on 01722 422300 or visit their specialist websites at http://ww2.extendingalease.co.uk or http://www.enfranchisementsolicitors.co.uk.