Why is it the right time to extend your lease or purchase the freehold of your property?
Leaseholders should take advantage of the current 'credit crunch' and consequent low property prices to extend the lease or buy the freehold of their property as the lower value of the property will be advantageous to the leaseholder when determining the cost of extending the lease. Not only will a flat with a longer lease be more attractive to potential buyers, it will be more saleable as lenders are frequently reluctant to lend on flats with shorter leases.
Our Property solicitors at Wellers not only have much experience of handling lease extensions but also have close ties with a specialist surveyor who has saved clients thousands of pounds on extensions and the purchase of freeholds.
Do I have the right to extend my lease?
How much does it cost?
It is standard practice that you will have to pay the freeholder's legal costs as well as the premium for the lease extension. The premium to be paid for the lease extension is based on the value of the ground rent, the value of the freeholder’s reversion at the end of the lease and half of the so called 'marriage value'.
What is 'marriage value'?
The 'marriage value' is the increase in value when the freehold and leasehold interests are combined or married together. If your lease is approaching 80 years left to run, cost savings can be made if you act now.
Once you have obtained a value for the premium, your solicitor serves a notice on the freeholder making a monetary offer. The freeholder either accepts the notice or serves a counter-notice stating his asking price.
If there is no agreement, both parties should try to negotiate a price. If this fails, then either party can apply to the Leasehold Valuation Tribunal who will determine the price.
If you have already agreed the premium costs with the freeholder informally and/or would like further advice and assistance regarding the above, please contact a member of the Conveyancing department on 0208 464 4242 or email propertydept@wellerslawgroup.com for more details.
