Selling a leasehold flat can be challenging; particularly when you have less than 80 years left on your existing leasehold. The main issue is that the value of your home or property will begin to lose value as the time period of the lease reduces. Buyers can find it difficult to get a mortgage from lenders and in turn, you could be left in a frustrating situation. However, you should be able to apply for a lease extension of an additional 90 years. So let’s look at the lease extension process in greater detail.
The Basics of the Lease Extension Process
There are two main ways you can go about securing a lease extension. Firstly, it may be a good idea to speak with your freeholder and discuss the situation. This can avoid many of the difficulties and costs involved with taking a more formal route. However, it’s not always that simple. You may not be in touch with the freeholder. Your freeholder might not be willing to offer what you believe to be a fair deal. Or they may try to put disagreeable terms and conditions or costs within the extension.
Your second option is to apply for a formal extension using a legal route. If you are a Leaseholder and have been living at the property for a minimum of two years then you can apply for an extension. Your rights to this fall under the Leasehold Reform Housing and Urban development Act of 1993. Assuming that you meet the criteria, there are still some steps you’ll need to take. These will include:
– Selecting advisers such as surveyors and solicitors.
– Assessing all premiums and financing issues involved.
– Gathering all necessary information and documents as detailed in the official government website.
– Preparing the notice itself.
Once you have all the necessary paperwork and information, it’s your responsibility as the applicant to comply with all the relevant deadlines. Please remember that as a leaseholder you will also be responsible for any fees charged by your freeholder in relation to the lease extension process. However, there are guidelines limiting what a freeholder can charge and they must be deemed reasonable.
Fees Associated with the Lease Extension Process
As we pointed out earlier, if your lease falls below 80 years, you’ll need extend it if you want an easier sale. It’s important to understand that the cost of extending your leashold will rise as the remaining years reduce. According to Money Saving Expert, the breakdown is as follows, for a property worth £200,000 pounds associated with a 90-year extension:
– A lease length of 79 years should cost approximately £6,500 pounds to extend.
– A lease length of 70 years should cost approximately £14,000 pounds to extend.
– Finally, a lease length of 60 years should cost approximately £24,000 pounds to extend.
You can see from these figures, that should your lease need to be extended, it’s best to tackle the problem sooner rather than later. Please note that costs can vary depending upon your individual situation.
So there is our basic breakdown of the lease extension process, some of the major details that need to be addressed and the approximate costs involved. It is always best to speak with a solicitor to learn more and to answer any additional questions.