Homeowners – time is right to extend lease
If you are a homeowner and have a flat and maisonettes, now is a good time to look at extending your lease while property prices remain low.
Most property owners have a legal right to extend their leasehold and if your lease is due to expire within the next 50 or 60 years, this would have an impact when it comes to the value of the property and / or maybe more difficult to sell.
Many banks and building societies are reluctant and unwilling to lend and give mortgages if there is fewer than 60 years left to run on the lease.
Current legislation now allows most leaseholders the right to extend their lease by 90 years, in addition to the unexpired lease term. This is know as a process called ‘Enfranchisement’ and the owner is obliged to pay the landlord a premium for the lease extension.
Now is a good time to apply for a lease extension, due to the premiums charged usually follow property values, which are still well below the 2007 peak.
Posted: 27th August 2010