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13/05/2009 - Take advantage while the market is low

Aim to make your lease more marketable by extending your lease or buying the freehold of your building.

An extended lease or a lease with a share of the freehold is likely to appear a better prospect for your mortgage lender.

Long residential leaseholders should take advantage of the lower property prices now in order to extend the lease of their flat. Leaseholders experiencing difficulty in selling their flat or buyers who wish to satisfy strict mortgage lenders’ conditions will be pleased to hear that a lease extension could assist.

Leaseholders have the right to an extended lease of 90 years in addition to the remaining term of their lease at effectively nil rent (subject to satisfying certain criteria). Property value is a significant factor in settling the premium that the tenant pays to the landlord for the lease extension.

Even if you do not plan to sell your property at the moment, taking advantage of the lower prices now is likely to prove beneficial later on. An extended lease is perceived to make the property more saleable. Delaying a lease extension may prove costly as not only will the property prices have increased but the length of the lease will have decreased, which in itself makes the cost higher.

When property values fall so too do the costs of buying the freehold of your block of flats.

Leaseholders have the right to compel their landlord to sell the freehold of their building to them collectively.

Serving a statutory notice on your landlord now will fix the valuation date while prices are low and will stop the clock ticking relating to the diminishing length of the lease.

Lester Aldridge LLP has considerable experience in this area of the law and practice. If you are interested in receiving further information on any of the above rights we would be pleased to hear from you. You can do this by contacting either Suki Samra on 01202 786317, e-mail: suki.samra@la-law.com or Eleanor Collins on 01202 786359, e-mail: eleanor.collins@la-law.com.

Authored by:

Suki Samra (show profile)

Published by:

Suki Samra (show profile)

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