To extend or not to extend- Are you facing the leasehold dilemma?

  • Author: Daniel Curry
  • Posted on: 19th February 2019
  • Posted in: Blog

Homeowner or Buyer- How could the leasehold dilemma affect you?

The complexities of home ownership facing both homebuyers and owners are already vast, and adding the responsibility of managing a lease to this can be daunting.

Extending a lease is a key factor to consider when purchasing a property as the number of years left on a lease can affect the sale of your property, as well as any future remortgage applications.

A property that has a lease below 80 years can have a detrimental effect on the value of the property and this, therefore, poses a risk to the potential mortgage provider, this is why it can be tough to find a provider willing to lend on a 'short lease' property. There is also the cost issue to consider as a property with a lease below 80 years can be expensive to extend.

The UK Government are currently entered into a consultation process, so whether you are looking to buy your freehold or extend a lease, it is important to understand how this could affect you.

What is the consultation all about?

"Leasehold enfranchisement law concerns those who own property on a long lease. The enfranchisement legislation gives these leaseholders several important rights." (website: Law Commission).

Property owners will have the right to:

  • Extend their lease;
  • Acquire the freehold of their house
  • Acquire the freehold of their block of flats (this applies collectively)

The proposals include making the lease extension process quicker, easier and more cost-effective, and also to reform the existing rights of leaseholders, including removing the separate rules for houses and flats.

So the question remains- do you extend your lease now, or wait for a better deal to emerge?

The main dilemma facing homebuyers and owners is that the longer you wait to extend your lease, the more expensive it will get. The options are:

  1. Take Action Now- If you have a short lease (ie: your lease is nearing the 80-year mark), this means it may be more prudent to take action sooner rather than later.
  2. See What The Future Holds- Wait for the Law Commission's proposal to be confirmed - you can find out more about their proposals in their Consultation Paper.

Still not sure which option is right for you?

If you are considering buying a property, or have a lease which you need to extend and need further advice to help unpick the complexities of the leasehold dilemma, then we can help.

Our experienced Property Solicitors offer a FREE no-obligation first meeting to discuss your property matter and will provide transparent and jargon-free advice at all times. Get in touch with us today on 01273 734 600 or email advice@crosbywoods.co.uk