Do you own a leasehold property?
There are over 2 million leasehold properties in England, mainly flats.
Have you looked at extending the length of the lease or jointly buying the freehold?
If the remaining length of your lease is 85 years or less than this may affect mortgageability and the value of the property will start to be affected.
Under the 1993 Leasehold Reform Act most flat owners are legally entitled to get a 90 year extension to their lease as long as you have owned the flat for at least 2 years.
There are several 1960s blocks with 99 year leases in this area where this is becoming an issue and some hopeful landlords are quoting high premiums for lease extensions or enfranchisement.
If you have over 80 years remaining on the lease, the cost of this extension is less than if there is 80 or less remaining, because at this point you will have to pay 50% of the flat’s ‘marriage value’ on top of the usual lease extension price. Marriage value is the amount of extra value a lease extension would add to your property.
Paul Wright, Head of Residential Surveying, can offer valuation advice if you are thinking of extending your lease, whether by a statutory 90 year lease extension under the terms of the Act or by arrangement with your freeholder which can be undertaken at any time for any length of extension with any ground rent.
An option if you are not happy with the maintenance charge or your leasehold’s freeholder is to go down a leasehold enfranchisement route where the building’s flat owners club together to collectively purchase the freehold of the block which then allows you to appoint your own management company and not pay ground rent. To undertake a collective enfranchisement, you require over 50% of the leasehold flat owners to participate in the purchase and collectively they would need to purchase the whole block’s freehold.
With both scenarios above, legal advice should be sought from a specialist legal advisor in tandem with valuation advice from a specialist Chartered Surveyor, such as Paul Wright, BSc (Hons) MRICS who can be contacted on 01473 417 718.