Lease Extensions and Short Leases

Lease Extensions and Short Leases

In recent years the banks and building societies have tightened their lending criteria on leasehold properties and they now often require a minimum of 65 - 70 years unexpired term for mortgage purposes and this potential could affect the value of a property.

The reason given by the banks for restricting lending on certain lease lengths, is that they need to take into account the effect the lease length on the future marketability of the property.

The good news is that The Leasehold Reform and Urban Development Act 1993 gives flat owners the right to a lease extension of 90 years on top of the current lease with few exceptions. Once lease has been extended the ground rent becomes a peppercorn (nil).

With many apartment blocks in central London having leases falling below 80 years, it is important to consider extending your lease at the earliest opportunity because the longer the unexpired term of the lease, the lower the cost of extending the lease will be, so it’s best to act early.

If you have owned your flat for two or more years you will have the right to extend your lease. The cost of a lease extension is complex primarily based on ground rent yields and the length of the unexpired lease and is calculated by an expert surveyor and negotiated with the freeholders appointed valuer.

To start the process you need to serve a Section 42 Notice of Claim. One served the benefit of the right to an extension can be assigned to a buyer on completion of the sale. Clauses dealing with the Notice are incorporated into the sale contract to be agreed prior to exchange of the sale contract. In this way a buyer does not need to wait two years before extending the lease.

The flat owner will have legal and surveyors costs plus is also responsible for the reasonable legal and valuation costs of the landlord. Your solicitor is best placed to provide a cost estimate.

Hurford Salvi Carr have helped a large number of clients extend their leases often to assist the sale of a flat and are able to recommend a number of local solicitors with specialist Enfranchisement Departments and expert valuation surveyors with who we work closely to guide you through the process.

 

We list below three firms of solicitors who specialise in lease extensions plus valuation surveyors who are active in this field and would be able to represent you in meeting the regulatory requirements of applying for a 90 year lease extension.

Specialist Solicitors

Bishop & Sewell                                      Att: Mark Chick
59-60 Russell Square                             Tel: 020 7079 2415
London WC1B 4HP                                  mchick@bishopandsewell.co.uk

Bolt Burdon                                             Att: Tornike Purcell
Providence House                                  Tel 020 7288 4757
Providence Place                                    TornikePurcell@boltburdon.co.uk
Islington
London N1 0NT

Sykes Anderson Perry                           Att: Christopher Sykes
5th Floor                                                  Tel 020 3794 5959
Salisbury House                                      chris.sykes@saplaw.co.uk
London Wall
London EC2M 5QQ

Seth Lovis & Co                                     Att: Vipal Matwala
25 John Street                                       Tel: 020 7492 0778  
London WC1N 2BS                                Vmatwala@sethlovis.co.uk

 

Specialist Short Lease Valuations Surveyors

Chris Glew
Myleasehold
45 Chiltern Street
London W1U 6LU
Tel: 020 7034 3435
chris@myleasehold.co.uk

 

James Rangeley BSc (Hons) Pg Dip MRICS
Director
JSS Egerton
17c Curzon Street
London W1J 5HU
Tel: 020 7664 6648
jamesrangeley@jssegerton.com

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