We are fully experienced in dealing with leasehold and freehold tenures.
There are two fundamentally different forms of legal home ownership: freehold and leasehold. The difference can be between a home that is worth buying and one that may not be. If you own a leasehold property it is important to be aware of the time left on the lease. Short lease terms, those below 80 years, can affect the value of the property as well as a potential buyer's ability to secure a mortgage.
The 1993 Leasehold Reform Act allows most leaseholders to extend their leases by up to 90 years, to potentially improve the value of the property. There are some conditions:
- You must have owned the property for at least two years
- There must have been at least 21 years on the original lease
Leasehold can be extended at any time, whether or not the property is being sold. If you're a home owner and want to extend the lease but still live in the property, the process is straightforward. You will need to instruct a surveyor to carry out a leasehold valuation. The surveyor will establish the likely cost of extending the lease and then serve notice to the freeholder.
Extending the lease during the sale
Many leasehold extensions are carried out during the sale process so a maximum sale price can be achieved. As a vendor you will need to carry out a leasehold valuation in the same way highlighted above.
Between the exchange and completion stages of the purchase your solicitor will inform the landlord of the wish to extend the lease and offer a price for doing so based on the leasehold valuation. This means that the buyer can take over the application, rather than having to wait two years before they are entitled to begin the process themselves.
Buyers should seek independent advice so that they can renegotiate the agreed purchase price if required.
You may also be interested in acquiring the freehold of your property, or a joint share in the freehold of your building with other owners. Since 1993 leaseholders have been entitled, with certain stipulations, to do this whether a landlord wishes to sell or not.
We can provide property owners, vendors and buyers with a leasehold valuation for the extension application. Please call us on 0800 328 8898 or send us an email for a leasehold valuation quote.