Protect your investment by extending your lease

17th April 2015

A leasehold property is one where someone else owns the land on which the property sits. There are rules, called covenants, written into the lease that say what you can and cannot do. A freehold house or flat with an extended lease is much easier to sell than a leasehold house or a flat with a short lease.

A long lease is a valuable asset, but as the number of years originally granted diminishes, so does the value of the lease. Put simply, over time, the value of a leasehold property decreases and this can affect the ability of the homeowner to sell or re-mortgage.

Therefore, the ownership of a leasehold property can have very serious implications.  Julie Tomasik, head of residential conveyancing at Ansons Solicitors, says “for this reason, it is essential for property owners to protect their investment by buying the freehold of their house, or, if the property is a flat, by extending the lease. This should ideally be done whilst there is at least 80 years remaining.”

You only have the right to buy the freehold or extend the lease when you have owned the property for more than two years. This means that if you have found a property that you would like to buy, but are put off because it is leasehold, it is the seller who must deal with the problem. However, there is no reason why the sale and purchase of the freehold or extension of the lease cannot take place simultaneously.

It is quite easy to find out how many years are remaining on your lease. The first place to look would be in your property’s title deeds. If you do not have these, then often the freeholder, or their agent who you pay the ground rent to, can tell you. This information can also be obtained from the Land Registry very quickly and at a minimal cost.

It is possible to buy the freehold of a flat, but only if you get together with the other flat owners in the block. This is called ‘collective enfranchisement’. If there is an insufficient number of people willing to purchase, then you can apply to just extend the lease of your flat.

Your solicitor will deal with the legal transfer of the freehold to you or the terms of a new lease if you are extending. They will also register the change at the Land Registry.

The property team at Ansons Solicitors has extensive knowledge of leasehold property, including purchase of freehold and lease extensions. We can also put you in touch with experts who can help you negotiate the purchase of your freehold or lease extension for the correct price.

For further information on extending your lease, please contact Julie Tomasik on 01543 267988 or email Ansons Solicitors has offices in Cannock and Lichfield, Staffordshire.