411 Home Repair


Latest Articles

The Best Way to Clean Your Kitchen Cabinets

Your kitchen is prone to messes more so than any other room in your home. When you consider all of the cooking, eating, socializing, and even the...

on Oct 21, 2016

How to Turn Your Garage into a Home Gym

How to Turn Your Garage into a Home Gym Getting a gym membership can be a great way to get in shape, but for those who are pressed for time, or...

on Oct 20, 2016

Should You Cut Back On High Speed Internet?

If you’re thinking of cutting back on your expenses, you might think it’s a good idea to cut back on high speed Internet. After all, you reason,...

on Oct 19, 2016

5 Ways to Reduce A Household’s Environmental Footprint

A home’s environmental footprint refers to its overall impact on the environment, both in construction and when being inhabited. This...

on Oct 19, 2016

Landscaping - Keeping your Yard in Good Condition

After accomplishing the challenging task of constructing your home, the next area of focus is your yard. The importance of landscaping goes beyond...

on Oct 19, 2016

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. 



Steve Gott

Sponsored Articles

Random Articles

Kitchen Appliances Every Home Chef Should Have

Technology has made our daily chores easy to accomplish. Nowadays, technology in the kitchen has changed the way we cook. Many appliances available...

Kitchen / Bathrooms

5 Tips to Organize Your Home Office

Since it’s usually one of the most often used rooms in the house, keeping the home office neat and tidy can sometimes be a challenge. It’s...

Bedroom / Furnishings

Vanities - The Essence of your Bathroom

When you’re constructing a bathroom the most important decision you have to take is choosing a vanity. A bathroom is an important part of your home...

Kitchen / Bathrooms

The Benefits of Hiring Professional Movers

Packing up your house requires a lot of time and effort which can become very stressful for a lot of people. This is where getting professional...

Hire Contractors / Estimates

Do You Need a New Roof? Twelve Warning Signs

As any homeowner knows (and cringes whenever they think about it), the roof of their home is far from permanent. Although it's generally made...

Roofing / Gutters


Contact Us | Submit Article | RSS | 411homerepair © 2016