Leases and Extending Them

If you’re currently buying a flat you might be familiar with the terms ‘leasehold’ and ‘freehold’ but might not know what the difference may mean for you?

If you own the freehold you own the property and the land it sits on. If you buy a leasehold property you only own the property for the duration of the lease agreement . If the lease were to end your home may revert back to the freeholder.

It's good practice to ask about the lease length on a flat before you get too far into the buying process as the cost of extending a lease increases the shorter the lease gets. A lease that is 70 years or less could stop the bank offering you a mortgage.

Extending a lease of 80 years or less could prove costly. This is the threshold whereby you have to pay a high percentage of the flat’s ‘marriage value’. The marriage value is the amount of extra value a lease extension would add to the property.

If you are considering a flat with a short lease, it is advisable to evaluate the options to calculate if it’s financially viable. If the asking price is low because of a short lease, extending the lease will add value to the property so the investment could prove worthwhile.

If you’re a lessee or are buying a property and would like to discuss a lease, don’t hesitate to contact us.

Not only does Law-Match give you access to a lawyer within one hour of receiving your enquiry, we will also provide you with a telephone or face to face consultation at no charge. This means you can explore your options and quickly make informed decisions, without spending a single penny. The Law-Match network of firms will also guarantee that you will benefit from a discounted rate on their standard charges, or wherever possible no-win-no fee, to give you even more peace of mind.

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