What is a lease?
A lease is the legal right to use a property for a period of time. It can become increasingly difficult to sell a property with a short lease, as both prospective buyers and mortgage lenders become more reluctant to purchase these properties. As such, buyers may request that a leaseholder extends the lease as a condition of the sale.
When should I look to extend my lease?
We would suggest extending your lease before it has 80 years left to avoid a marriage fee. Marriage Value represents the total value of the property with both leasehold and freehold representatives considered. The freeholder is entitled to half of the marriage fee value, meaning if you are wishing to extend the lease agreement then you would have to include this value in the offer to the freeholder. Once a lease is extended it can add significant value to a property.
How much does extending a lease cost?
There are a number of factors to consider in determining the price of a lease extension, these include:
- Property value
- Existing lease length
- Ground rent cost
The Leasehold Advisory Service provides a handy calculator to give you an estimate, but please be aware that there are other fees involved in extending a lease, such as the professional costs for both yourself and the freeholder.
How long does it take?
Typically, we advise that the lease extension process lasts around 2-3 months. However, this depends on the relationship and negotiations between the freeholder and leaseholder.
To talk through your options as a leaseholder and get a quote for our services, please contact our conveyancing team today.