Successful Lease Extension - What Every Leaseholder Needs To Do

Extending your lease might be the last thing on your mind at the moment. Well, why think about it when it won't run out for 99 years? Surely you have more pressing and important things to deal with. However, think again, not extending your lease could in fact hinder the saleability of your home and could end up costing you unnecessary money. Extending your lease does not have to be a complicated and time consuming process, read on to find out how easy it can be.

1. Check your existing lease

How much longer does your present lease have to run? Remember, short leases seriously affect the value of a property, unless you're lucky enough to live in an urban property hot-spot. More to the point, most buyers are reluctant to buy a property with a short lease, and most mortgage companies are reluctant to lend against them. Even if you are not thinking of selling soon, you should still think about the future and looking after your investment by extending your lease. If the remaining lease term is approaching 80 years, then you need to act fast (see point 2).

2. Weigh up the costs

Extending a lease naturally requires some initial outlay, so you'll need to balance short term expenditure against long term security and financial gain from resale. The crucial time for an extension is 80 years. When the term dips below 80 years you will become liable to pay 'marriage value' when extending your lease. This is approximately 50% of the increase in valuation of the property - an increase that you have to pay up front, even though it hasn't actually happened yet. This makes the whole thing much more expensive, so the lesson is - extend your lease before it dips below 80 years!

3. Turn it over to a professional

This is really an essential part of your strategy. Calculating the cost of a lease extension is extremely difficult as it requires finding out local property values and the amount of the landlord's ground rent. As such, you'll need to appoint a professional valuer, usually a surveyor. You will need to find and instruct a specialist solicitor. A specialist lease extension solicitor will deal with all the paperwork, communicate with your landlord and process the conveyance of the new lease, this will all make it simpler for you.

Although extending your lease might take a small amount of effort, if you follow this strategy you will reap the rewards in the end.

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