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Residential leaseholders take note…it may be time to extend your lease

Solicitor Adam Davis talks to us about the importance of a longer lease term and why residential leaseholders should look to renew theirs sooner rather than later.

As much as I love my job (the partners may read this), on a recent trip to Dublin I had intended to put all thoughts of leasehold enfranchisement firmly to the back of my mind.

Cue rolling green hills, folk songs, Galway girls and of course, a barrel or two of the Irish stout, which in turn led me to the inevitable tour of the Guinness factory. So far so good.

That was until approximately 5 minutes into said tour, when I found myself standing over the original 9000 year lease signed by Mr Arthur Guinness himself in 1759, at which point I was immediately transported back into work mode, lamenting the benefits of a long lease term…..great.

Clearly, for good old Arthur, and indeed all Guinness enthusiasts, the unquestionable benefit of his long lease is that it enables him to produce 50.7 million barrels of delicious stout annually for the foreseeable future (the €10 tour fee  evidently money well spent).

However, for a residential leaseholder of a flat, the benefits of a longer lease term are equally as important, and whilst the custodians of the Guinness brand will have you believe good things come to those who wait, that is certainly not the case for leaseholders with dwindling lease terms.

Why do you need to renew your lease?

In a nutshell, a lease is a wasting asset and as its term reduces, unfortunately so does the value of your flat. More specifically, when the lease term reaches 80 years, an additional nasty fee known as marriage value becomes payable, which, without getting too technical, essentially makes it more expensive to extend your lease.

 In addition to this, mortgage lenders are becoming increasingly reluctant to lend to buyers for properties with lower lease terms, and whilst ‘lower’ has previously been regarded as any term below 70 years, certain mortgagees are now restricting their lending to properties with 80, and in some cases, even 85 year lease terms.

It’s therefore no exaggeration to suggest that a short lease will not only reduce the value of your property, but it can also render it essentially unsaleable.

How can QS Amphlett Lissimore help?

A leaseholder can of course seek to remedy this problem by extending the lease term, and there are two potential methods by which this can be done; the informal and the statutory.  That’s where we come in.

Our leasehold team can provide expert advice and guidance on both methods, including: establishing your eligibility, recommending the most appropriate option for your particular circumstances and considering any additional requirements you may have (such as a related sale or purchase) to ensure that every possible aspect of your lease extension is dealt with for you and your aims are achieved as efficiently and cost effectively as possible.

Come and see the specialist leasehold team at Amphlett Lissimore because, quite simply, our leases are Made of More (ok Guinness analogy fully exhausted!).

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Are you looking to extend your lease? Would you like us to review your current lease? Contact our Leasehold Enfranchisement team today and let’s see how we can help.

About the Author

Adam Davis is a Solicitor in our Leasehold Enfranchisement team. Based in Crystal Palace, Adam specialises in all aspects of leasehold enfranchisement, acting for landlords and tenants.

 

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