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 a 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.
Bishop & Sewell
59-60 Russell Square
London WC1B 4HP
Att: Mark Chick0207 079 2415 email@example.com
Sykes Anderson Perry
5th Floor, Salisbury House
London Wall, London EC2M 5QQ
Att: Christopher Sykes020 3794 5959 firstname.lastname@example.org
Providence House, Providence Place
Islington, London N1 0NT
Att: Tornike Purcell020 7288 4757 TornikePurcell@boltburdon.co.uk
Seth Lovis & Co
25 John Street
London WC1N 2BS
Att: Vipal Matwala020 7492 0778 Vmatwala@sethlovis.co.uk