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:
- 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.
- 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 firstname.lastname@example.org