Over four million properties in England and Wales are leasehold – if yours is among that number, keep an eye on how many years are left on the lease. Any less than 80 and it’s time to extend it.
The number of leasehold properties in England and Wales is on the rise.
So what does leasehold actually mean? In effect, that you don’t actually own your home – you have merely bought the right to live in your property for a period of time set down in the lease, normally 99 or 125 years, rather than the land it stands on, which is owned by your freeholder.
There are a few potential pitfalls in buying a leasehold property, not least that you’ll have to pay ground rent to the freeholder every year and, unless you buy the right to manage the home yourself, be subject to the whims – and sometimes extortionate charges – of a management company appointed by your freeholder. Problems between freeholders, management companies and leaseholders are sadly not uncommon – and growing year on year, according to the Leasehold Advisory Service, which has been giving advice to members of the public living in leasehold properties for over two decades.
Some leasehold rents do not remain static, and in fact increase over time. You will want to check that the ground rent on the property does not spiral over a period of time. In some cases, particularly on newer properties, ground rents will double every 5-10 years; an issue that the Competition and Market’s Authority have recently taken enforcement action against
Another major concern for people who own leasehold properties is the length of the lease itself. If there are over 100 years on it, that shouldn’t be a problem. But if the term still to run on the lease is less than 80 years, that’s a real cause for concern. You either have to pay to extend it, buy the freehold yourself, or sit and watch as your home crashes in value.
Extending a lease isn’t necessarily a complicated procedure, however. The Leasehold Advisory Service has an online calculator, which will provide an estimate of the cost of extending at www.lease-advice.org. You’ll then need to have the value of your flat assessed by a surveyor, before engaging a solicitor to prepare papers setting out your case for buying and serving notice of your intent to do so on the freeholder.
For free advice about extending your lease, in England, contact the Leasehold Advisory Service (www.lease-advise.org.uk) and in Wales the Residential Property Tribunal (www.rpt.gov.wales). The Leasehold Knowledge Partnership (www.leaseholdknowledge.com) is also doing good work in campaigning to improve leaseholders’ rights.
If you do decide you want to extend your lease, or even buy the freehold on your property, contact us at LPL on 0333 305 5189 and enquiries@lpropertylawyers.co.uk.
We have been providing legal services around property in the England and Wales for 30 years and can make extending your lease a seamless, pain-free process – and give your home a new lease of life.
