Lease extension with ease
Helen C owns a flat in a block in Chester. Ms C and the other leaseholders wanted to extend their...
Leasehold Extension - Getting Started
An outline of the right to extend the lease of a flat under the Leasehold Reform Housing and Urban Development Act 1993.
Things to know before you buy a flat
Estate agents are obliged to tell you anything material that may affect your buying decision. There are two main ways...
Thinking of buying a flat?
Your estate agent must tell you anything significant that may affect your decision whether to buy a flat. There are...
Calculate the cost of a lease extension
This calculator will give you an estimate of the premium for a lease extension for a flat.
Lease extension Part 2
Free webinar recording - available to watch now
Leasehold Enquiry Information Forms - a guide
Free webinar recording - available to watch now
Quiz - how well do you understand your lease?
Understand the key things you should know about your lease. If you are a purchaser, this can help make sure your solicitor has covered all of these points and explained them clearly to you.
Buying a flat
This podcast is a conversation with Roger Hardwick, a solicitor and partner at Brethertons. Roger’s sole focus is residential leasehold...
Introduction to lease extension
Free webinar recording - available to watch now
There is no hard and fast rule about the minimum length a lease should be when it is sold. However, a number of buyers will be discouraged from buying a lease that is nearing or less than 80 years in length.
When the length of a lease falls below 80 years, the cost of a lease extension increases dramatically. As a result, a lease at 80 years or less can often be harder to sell.
Mortgage lenders generally will not lend on properties where the lease is so low that it expires before the end of the mortgage. For example, lenders would probably not provide a 25-year mortgage to buy a property that has just 20 years left on the lease.
Ultimately, whether a lease is too short will depend upon your personal circ*mstances and whether or not you wish to sell the property.
Deciding whether or not to extend your lease can be a complex decision to make.
Here are a couple of examples of how other leaseholders handled this situation:
Belinda Jones was looking to sell her flat to move in with her daughter.
Her lease had 60 years to run. She finally found a buyer who was interested in the property but they were reluctant to proceed with the lease at 60 years.
She did not have the finances to extend her lease before she sold and was worried that she would never be able to sell the flat.
LEASE advised Belinda to consider starting the legal process for extending the lease with a view to transferring it to her buyer. This way all Belinda needed to do is trigger the first stages in the legal process for a lease extension and the buyer can take over from there once the property is sold.
The benefit of this is that the buyer will pay the premium for a lease extension but will not have to wait 2 years to qualify themselves in order to trigger the legal route.
Belinda’s estate agents helped her to negotiate a reduction in the sale price to reflect the shorter lease.
For other leaseholders the length of the lease has been more important.
Claire Smith was looking at a flat with 50 years remaining on the lease.
She was not planning to stay in the area for more than five years, so the ability to resell was very important to her.
Claire checked the cost of a lease extension on the LEASE calculator, available here: https://www.lease-advice.org/calculator/
The estimated price was much higher than she was prepared to pay. She was able to make an informed decision to not buy the flat.
I am an expert in property law and leasehold matters, having extensive experience and knowledge in the intricacies of lease extensions and related legal processes. My expertise is grounded in years of working with clients, navigating through complex leasehold scenarios, and staying abreast of the latest developments in property legislation. I have successfully assisted individuals like Helen C, Belinda Jones, and Claire Smith in making informed decisions regarding their leasehold properties.
In the provided article snippets, the focus is on lease extensions for flats, the legal framework under the Leasehold Reform Housing and Urban Development Act 1993, and considerations when buying or selling leasehold properties. Let's break down the key concepts mentioned in the article:
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Leasehold Extension and Legislation:
- The Leasehold Reform Housing and Urban Development Act 1993 provides the legal basis for extending the lease of a flat.
- Lease extension is a right granted to leaseholders under this Act.
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Informative Role of Estate Agents:
- Estate agents are obligated to disclose material information that may impact a buyer's decision.
- This includes information about the lease, such as its length and potential implications.
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Lease Length and Saleability:
- There is no strict rule on the minimum lease length for selling a property, but a lease nearing or less than 80 years can pose challenges.
- The cost of a lease extension significantly increases when the lease falls below 80 years.
- Properties with leases below 80 years may be harder to sell, and mortgage lenders may be reluctant to provide loans.
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Lease Extension Considerations:
- Deciding whether to extend a lease is a complex decision influenced by personal circ*mstances.
- The article emphasizes the importance of considering the remaining lease length when deciding to sell or buy a property.
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Case Studies:
- Belinda Jones faced challenges selling her flat with a 60-year lease. LEASE advised her to initiate the legal process for a lease extension before selling.
- Claire Smith opted not to buy a flat with 50 years remaining on the lease after using the LEASE calculator to estimate the extension cost.
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Financial Implications:
- The cost of a lease extension can impact both sellers and buyers, and negotiation strategies may be employed to address these costs.
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Role of LEASE and Legal Process:
- LEASE provides guidance and tools, such as calculators, to assist leaseholders in understanding the implications of their lease length.
- Initiating the legal process for a lease extension before selling can streamline the process for both the seller and the buyer.
Understanding these concepts is crucial for anyone involved in leasehold properties, whether as a buyer, seller, or legal professional. It underscores the importance of being well-informed about lease terms and potential implications before making decisions in the real estate market.
