411homerepair.com

Latest Articles

Boost Your Electrical Service With Multitude

  Businesses that provide electrical services or goods and professional electricians make invaluable contributions to society. From the home...

on Jun 21, 2017

How to Check the Reputation of a Locksmith

In your life, you might have been faced by an awkward situation in which you had to stay out in the cold since you had lost the keys to your...

on Jun 19, 2017

Before You Put Your Trust in a Home Cleaning Company, Consider the Following

As is the case with every homeowner or renter, you have your reasons for hiring home cleaning professionals to come in and clean your home. Time is...

on Jun 14, 2017

Create The Ultimate Outdoor Area With A Veranda

When the weather is fine, we need to be outdoors to enjoy it. You could go for a walk or a run, hit the jogging track or the hiking trails or just...

on Jun 10, 2017

Maximizing ROI by Rehabbing Multifamily Properties

There are a number of rehab projects that multifamily investors typically acknowledge as time-tested solid investments because they are proven to...

on Jun 10, 2017

Extending Your Property Lease: Compelling Reasons

by Steve Gott on Jan 30, 2013

There are several compelling reasons to extend your property lease if you are eligible to do so. Although you may balk at the cost of a lease extension, in actuality, the price you pay to a solicitor to extend your property lease is ultimately a money saving move. You will be enhancing the value of your property, and you may no longer be obligated to pay ground rent.

DISCLAIMER: This article contains a general discussion of property lease extensions. It is not intended to represent legal or financial opinion or to provide legal or financial advice. Please consult with a solicitor who specializes in lease extensions with specific questions concerning your particular circumstances.

Avoiding Property Devaluation

It is clear that a short lease almost always results in significant property devaluation. Of course, there are always exceptions. However, as a rule of thumb, the closer you are to a maximum lease limit, the closer your property value will be to the freehold value.

It naturally follows that if you have a short lease, extending it can avoid a serious devaluation of your property. While it is impossible to provide exact figures, a rough comparison is sufficient to illustrate this point.  For instance, a flat lease of 100 years has approximately the same value as a freehold. On the other hand, a lease of 60 years is only valued at approximately 60 percent of the price of a freehold.

Leasing Homes

Increasing Sales Value

Given a choice, with all other factors being equal, which property seems more valuable: a property where you are secure in long term residence, or a property for which you must expend time and effort to protect it from reverting back to the freeholder? While wealthy buyers who have access to lenders willing to approve mortgages with short leases may not be put off by a property with a short lease, many other buyers are scared off from such properties, no matter what other features they may have in their favour.

This is because many mortgage lenders set a minimum length for the lease, usually about 30 years from the end of the mortgage. This means that often, a buyer who wants to purchase your property will be unable to do so.  As a result, you may find yourself with a property that is impossible to sell.

Marriage Value

Marriage value is the difference between the value of a property with its current short lease and the value after the lease has been extended. Under the terms of the Leasehold Reform, Housing and Urban Development Act 1993 that uplift is divided equally between the landlord and lessee.
 

If you intend to purchase a lease extension, do so while the property lease has at least 80 years remaining as for properties with leases in excess of 80 years any marriage value is disregarded when extending.

Qualifying for a Lease Extension

To qualify for a lease extension, you must have owned the property for at least two years before you apply.  However, if you are purchasing a property, and you anticipate that you may want to extend the lease, ensure that the seller serves initial notice on the landlord before you finalise the sales contract. By doing so, you can receive the benefit of that notice without being subject to the two year ownership rule.  This creates a win-win situation for the mortgage provider and for you.

This post was contributed by Justin Burns for PeterBarry.co.uk - Letting Agents Oakwood. Justin has extensive experience in the real estate industry. 

Author

stevegott99

Steve Gott

Sponsored Articles

Random Articles

Remodeling with Safety in Mind

Remodeling can be a time consuming and stressful time in the life of any homeowner. There are the jobs that start off being small and simple, but...

Safety / Security

Why Use a Convection Microwave?

A convection microwave is one of the most convenient appliances to use in today’s modern world. Microwaves are used for quickly heating up foods...

Appliance / Repair

Kitchen and Bath Remodeling Increases The Resale Value of a Home

Homeowners that are trying to boost the resale value of their home tend to figure out very fast that not all renovations are created equal. A lot...

Kitchen / Bathrooms

The Top 3 Most Unique Offices in The World To Work

Fluorescent lights, rows of cubicles, grey carpet and blank walls: These are the features of the archetypal modern office. They are boring and...

Real Estate / Finance

Metallic Finishes & Accents

It can sometimes be hard to achieve a fresh and stylish décor in your home that oozes elegance and sophistication but stays far away from clinical...

Interior Design / Decor

Actions

Contact Us | Submit Article | RSS | 411homerepair © 2017