If you own a flat I would like you to do something for me. Please could you find a copy of your lease and check the number of years remaining. If you have more than 90 years left think about how long you intend to keep your flat.
If the answer is that you will be selling in the next 5 years, then you can click elsewhere to a more interesting read! However, if you have less than 90 years left, or you intend to hang onto your flat, then please try to stay awake to finish reading this. As a couple of minutes now could save you a few hundred, potentially thousands, of pounds and avoid a headache in the future.
There are two reasons for this, the first is because once a lease has less than 80 years remaining a larger premium must be paid to the Landlord to extend it. In any case, the longer the remaining term is, the less the premium will be to extend the lease.
The second reason to avoid allowing the remaining term of the lease to reduce to 80 years is because lenders are reluctant to accept leases of less than 80 years for mortgages. This means that you could be unable to either remortgage or sell your flat or you may be offered less favourable terms or a reduced sale price.
To extend a lease when there is a time pressure, such as a sale or a remortgage, adds a level of stress and complication which could be avoided. If you decide to extend your lease when there is no pressure to do so, then you won’t have to think about it ever again!
Please contact me, Ruth Burrell, if you would like to discuss a lease extension – I am happy to talk about them all day! But I promise I won’t!