We have all heard lots of jokes about marriage and it is true that it can be expensive but nobody pays more than a leaseholder with a short lease. I will explain.....
By Roger West, Principal Mortgage Adviser at Peritum Mortgages
If you buy a leasehold property you have the right under the Leasehold Reform Act of 1967 to extend your lease once you have owned the property for two years. However, the Act does not say how much the extension will cost and that is something you will have to negotiate with the Freeholder.
What the Act does specify is that if you want to extend a lease that has less than 80 years to run you will lose out to the Freeholder because of the ‘Marriage Value’. As the lease is extended the value of the property increases and half of any increase is given to the Freeholder. Of course, there are also professional fees to consider.
If you already own a property with a lease approaching 80 years or if you are planning to buy a leasehold property the unexpired term is all important and will have an effect on the price / value. Mortgage lenders are also concerned about short leases because they know how difficult it can be to sell a property with a short lease.
As is so often the case - preparation before action can pay huge dividends.
More information is available from https://www.leaseholdadvice.com/lease-extension?https://www.leaseholdadvicecentre.co.uk/lease-extension&gclid=EAIaIQobChMIzdbzr8mc8gIVVODtCh1pZw6JEAAYAiAAEgIbSPD_BwE and also from https://www.lease-advice.org/advice/find-the-right-information-for-you/?step-option=61
You can find basic details of an existing lease at https://www.gov.uk/search-property-information-land-registry. Or….call Peritum Mortgages free of charge on 0800 002 9080.
Ancojada Limited trading as Ancojada Group is not authorised or regulated to provide financial advice.
All financial advice is provided by other regulated businesses.