OMG! – I only have 80 years left on my lease
Did you know that once the lease of your flat falls below 80 years, even if it just goes days over, the cost of a lease extension increases dramatically due to marriage value being payable?
Keeping your London property value
In London, property owners will be aware that you need to look after your property if you want it to increase in value. Although the Capital’s market prices are booming, your property still needs to be maintained to a good standard. When it comes to leaseholds, it’s not just caring for the property in a maintenance sense that matters; you need to look after your lease too! Neglecting your lease can have a very negative impact on your property value.
Don’t let your lease fall below 80 years
It will be worth less than you think
If your lease expiry term is approaching 80 years, the chances are it is going to be worth less than you might think, and if it drops below 80 years then you’ve less chance of increasing value at all, even when the property market is rising in general.
It will be harder to sell
You might be enjoying a nice rental income from your leasehold property, but it is worth bearing in mind that if the lease expiry term drops below 80 years, then should you need to sell the property, it will be much harder to sell. Potential buyers will be put off by the thought of incurring extra costs to extend the lease. In addition to this, mortgage lenders are more reluctant to lend for properties with shorter leases, and if the lease expiry term falls below 70 years, it can become very difficult to find a lender.
It makes financial sense
With marriage value payable if your lease drops below 80 years, it is also going to be very expensive to extend your lease anyway, and could cost a huge amount more than what it would cost you to have extended the lease just months before. For more information on marriage value and how it is calculated, get in touch with the Westcolt Surveyors team who can help you with everything you need to know.
If you’ve let your lease get very close to 80 years, or even fall below it, it still makes a lot of sense to extend the lease to preserve your property’s value. If you’ve owned your property for over 2 years, and the original lease term in which you bought the property was longer than 21 years, then you will definitely be able to extend your lease. If you meet this criteria, then you will be entitled to a 90-year lease extension on top of your current term, and your ground rent will be reduced to nil.
The process of extending your property can take as long as 6-12 months, so if it is on your “to do” list, then we would strongly suggest that you act now and don’t procrastinate! The first step would be to get a specialist surveyor, like ours available at Westcolt Surveyors, to come out and estimate the cost of extending your lease. If you’d like to arrange this, get in touch with our team who can get things in place for you.