I have noticed a huge increase in enquiries for lease extensions as Mortgage companies are becoming increasingly nervous about lending on shorter leases. The less years to run on your lease the more expensive the premium to extend. Delaying could end up costing you thousands of pounds more.
What are your options?
You can extend your lease on a voluntary basis with your landlord or alternatively if your Landlord is unwilling to agree to a lease extension you can make a claim under the Leasehold Reform Housing & Urban Development Act 1993 (“the statutory route”)
If your landlord is willing you will need to agree a price and the terms which could include an increased ground rent or other terms for agreeing to extend the lease.
If you use the statutory route, 90 years will be added to the remaining term and ground rent will be reduced to zero. However in order to use the statutory route you have to satisfy certain criteria, one of which is that you have been the registered proprietor of the property for at least two years.
It is important in both cases to obtain a lease extension valuation by an experienced Surveyor to make sure that you are not paying too much or you are agreeing to terms that may be detrimental and unattractive to a prospective buyer.
What else do I need to think about?
If you use the statutory method you are required to pay your landlord’s reasonable legal and valuation costs. If you are agreeing a lease extension with your Landlord it is likely that they will still want their costs paid by you as part of the agreement.
If you use the statutory route and you are unable to reach an agreement with the Landlord you are able to apply to the First Tier Tribunal (Property Chamber) for a determination of the premium and also the Landlord costs if you think that these are unreasonable.
Need more information?
Please ring Rita Wright for further information or even a chat to discuss your options on 01992 558411 Rita.Wright@BreezeandWyles.co.uk