The main reason for extending your lease is that once the remaining term of a lease drops below 80 years, the cost of an extension rises by what is called the ‘marriage’ value. This means the value of your lease is likely to start to decrease and the cost of extending it will increase significantly, so we always advise extending before the 80 year threshold is reached.
It is also important to consider that leases of a shorter duration, particularly with less than 60 years to run, can inhibit sales and re-mortgages as banks are often reluctant to lend against the shorter term leases.
The 1993 Leasehold Reform Act (as amended) provides for the right to be granted a new lease for a term of 90 years, plus the present unexpired term. The formal procedure is started by the service of the Tenant's Notice on the landlord and it then follows a prescribed route. This is the beginning of the formal process for acquiring the 90 year extension.
Lease extensions do not, however, need to follow the formal prescribed route and can be agreed on informally between landlord and tenant directly, although the tenant should expect to pick up the landlord's 'reasonable costs' associated with the process.
There is a substantial amount of work involved in a lease extension and Property Fusion is always happy to help you through the service with minimum hassle and cost.
If you would like an idea of how much your lease extension may cost or for more information, call us on 01273 917790.