- November 18, 2015
- By Ian Mitchell
- 0 comments
Lease extension solicitors for Balham and Clapham
Anthony Gold Solicitors block contact program is increasing awareness amongst leaseholders in the Balham and Clapham areas about the 80-year rule and what it means to have a low lease.
If we have acted for one of your neighbours and we have identified by reference to the freehold title of your building that your flat’s lease also needs extending we may send you an information flyer about our specialist lease extension services.
Why do we do this?
Because not knowing about the problem of a low lease could have serious financial implications for leaseholders.
As the unexpired term of a lease gets shorter the value of the property decreases. When a lease expires the property will, in theory, revert to the landlord and it is therefore necessary to ‘extend’ the lease well in advance of this event.
The 80-year rule
The premium payable for a lease extension of a flat with between 80 – 90 years tends to remain fairly static because no marriage value is payable at all on the calculation of the premium.
80 years is the crucial cut-off point. Below that point the lease becomes more costly to extend because you will have to pay your landlord 50% of the difference between the value of the flat with a long lease and the value of the flat with its existing lease term. This differential is the marriage value element of the lease extension price. An expert valuer will advise you on the precise differential/marriage value element of the extension premium.
Banks and building societies differ in their lending criteria for low leases. Some draw the line at 75 years remaining on the lease; others may be happy to lend on leases with over 70 years. Below 60 years, it may be difficult to get a mortgage at all.
The message we have for leaseholders with 85 or less years on their lease is to not delay in extending.
The 4 strong Leasehold Services team headed by partner Ian Mitchell continues to offer free initial consultations to leaseholders at all our offices and off site.